Effective Factors on the Personnel s Performance Evaluation System and Presenting Desirable Approaches in Sepah Bank of Iran

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1 Technical Journal of Engineering and Applied Sciences Available online at TJEAS Journal / ISSN TJEAS Effective Factors on the Personnel s Performance Evaluation System and Presenting Desirable Approaches in Sepah Bank of Iran Gh. Eskandari 1 *, E. Sinof 2 1. PH.D candidate at management in Tajik national university, Tajikistan 2. Head of management in Tajik national university, Tajikistan Corresponding author: Gh. Eskandari ABSTRACT: This paper studies the factors that affect the personnel and Human Resources evaluation system at Sepah Bank and introduces few hypotheses that expresses the relationship among different variables, and studies the existence of those relationships and their amount. The data was collected through a questionnaire that contains Cronbach Alfa coefficient of 63 percent and was analyzed by using the partial least square model (PLS). The results of the research show that the availability of skilled assessors, specific and results feedback have effects on the evaluation of personnel s. In addition, the effect of evaluating personnel s in present evaluation system in Sepah Bank on other factors such as individual capabilities of the personnel, identifying capable human resources, and personnel s enthusiasm in participating in educational courses were studied and all the hypotheses presented in those cases were rejected; on the other hand, the effect of the evaluation on the commitment towards the was confirmed. Keywords: Personnel s Performance Evaluation, Human Resources, partial least square model INTRODUCTION With no doubt, present era is the era of s and the authorities of those s are people. There are people that are able to create excellence, perfection, movement and growth of s by possessing the greatest source of power; that is, thought. Human capitals refer to the merits and qualifications of personnel in creating tangible and intangible assets through developing and presenting ideas and knowledge (Brooking, 1996) In the high speed world of today that is filled with evolution and competitions, it is the qualified, creative and dynamic human forces that could lead to the emergence of competitive advantages of s. For this reason, human resources are considered as the major intangible assets and it is fair to see personnel as the golden key in the improvement of quality and productivity of all al processes. Essentially, any has been established to achieve some goals and the degree of its success in achieving that goal has direct relationship with the procedure of its. Therefore; evaluating the personnel s and their function in human resources management is standing in a high place. Without employing an evaluation system for measuring, actions such as promotion, transfer and other personnel decisions would be fall in the hands of trial and error. Problem expression If personnel s evaluation is not done properly, it could lead to the emergence of disorders and many damages, which could affect the whole of the. The s managements seek achieving the goals of the in the best possible manner; however, there are always some obstacles and barriers in their way. Problems such as, how advantaged individuals could be found among? How the salary and benefits could be determined based on efficiency and effectiveness? In what way the would show more commitments and ties to the? What type of educational programs should be provided for personnel? How is it possible to provide job satisfaction for personnel? How is it possible to establish a proper selection system for individuals? And, many several questions of this type. On one hand, absence of a suitable evaluation system might cause many undesirable effects such as followings:

2 Disability in identifying the educational needs Absence of a reasonable and just basis to determine the degree of personnel s qualification Lack of proper criteria for planning and horizontal and vertical replacement of personnel Decrease in motifs and interests to work and in personnel Absence of the possibility to evaluate the credit and precision in recruitment tests and selection system Decrease in work consciousness Lack of establishing proper method in allocating salary and benefits to. With respect to the above-mentioned subjects, this paper studies the effective factors on evaluation system as well as factors that are affected by it. Study the history of subject To evaluate the of in is one of the major purposes of using human resource practices. In the competitive environment of modern era s are persistently improving of their by improving HR practices. Caliskan (2010) acknowledged that HR practices are one main source of competitive advantage. Many researchers have proven that HR practices have a significant and positive relationship with. (Caliskan, 2010) The concept of Human Resources Management (HRM) was first introduced and popularized in mid 1960s. Islamic Republic of Iran is in the list of countries that have fair (average) human resources development. (Davood Izadi)Countries adopt different approaches in HRM. (Moghimi, et al., 2006) HRM is efficient only if it becomes able to recognize the largest number and best qualified persons in the and benefit from their abilities in the progress of s goals. (Regnant)This important concept becomes possible through making proper human resources evaluation. Performance evaluation follows different goals such as: One of the goals of evaluation system is to determine promotable and transferable goals. (Wayne Casio, 1992) One of the goals of evaluation is to determine the amount of increase in salary, bonus that is, compensating services. (Don horvey et al., 1996) According to OSEC business network Switzerland February 2011 report, Banking sector of Pakistan comprised of 36 commercial banks (including 25 local private banks, 4 public sector commercial banks and 7 foreign banks) and 4 specialized banks. Among these banks, there are 6 full-fledged Islamic banks. (Consulate General of Switzerland) (Consulate General of Switzerland, 2011)Researchers numbered all the 36 commercial banks on paper slips and then mixed these slips. Researchers choose one slip and similarly mix others again and again to reach a reasonable sample of 22 banks for this study. In the second stage, stratified random sampling is used for selecting the from the sample banks. The reason for preferring random sampling technique is that it gives equal chance to each bank operate in the Pakistan and also helpful in generalization of the results of sample back to population (Shahzad et al., 2008 and Castillo, 2009). Performance evaluation has highest contribution in explaining the employee perceived is and significant at 1% level of significance. The result is in accordance of previous research on banking sector of Pakistan (Baloch et al, 2010). So researchers found evaluation most important HR practices. If these practices are properly implemented by the banks in Pakistan, in return they can get multiple benefits. The previous studies suggested that banks can get multiple benefits from these practices like; Prime merit of evaluation is that it can facilitate the banks to take proactive actions regarding other HR practices like increasing salaries under compensation practices, promotion practices and many other incentive schemes in order to boost of the bankers. There is a close tie between individuals motifs and the evaluation results. According to the theory of justice, feeling of satisfaction is one of the results of fair evaluation; therefore, if feel the evaluation as unfair or unsuitable, they might take different actions such as absence or quitting the job. (Demirci, 2007) A basic explanation of motivation is the capability to change behavior. Motivation is a drive that holds one to act because human behavior is directed towards some kind of goals. (Demirci, 2007) Grant (2008) conducted a study where motivation enforced the employee outcomes such as persistence, productivity and. Besides, motivated are found to be more self-driven and more autonomy-oriented than those who are less motivated (Ryan and Deci, 2000; Thomas, 2002, as cited in Grant, 2008), which suggests that they will take more responsibility when offered developmental opportunities. Motivated are also more engaged and involved with their jobs (Guay et al., 2000; Vansteenkiste et al., 2007), they may be more involved in the work of their colleagues, when compared with with low motivation. (Kuvaas, and Dysvik, 2009). Figure 1 (Farahni et al., 2005) and 2 show the conceptual model of the research. 2239

3 Number of educational course passed by evaluators Availability of skilled evaluators Suitability of scientific education of evaluators and evaluation Amount of sufficient and relevant experiences of evaluators and evaluation Amount of familiarity of evaluators with the personnel s duties and responsibilities Ability to recognize personnel s Amount of showing justice in the evaluation Employees Performance Evaluation System Have effects Existence of specific Employeesآ knowledge on the Degree of transparency and clarity of criteria and evaluation indexes The proportionality of with the duties and responsibilities of Amount of specifying the duties time in Amount of acceptance of by Ability to determine the difference in of by Amount of agreement and participation of in determining the in the beginning of evaluation period Amount of knowledge on duties methods Amount of information of the duties time Amount of evaluation interviews after the evaluation Existence of feedback of results of evaluation in Amount of effects of evaluation results in physical dimensions (salary, wages ) Amount of effects of evaluation in non-physical dimensions (education, training, promotion ) Amount of strong and weak points of based on evaluation results Amount of using the evaluation results for solving issues that cause work disorder Figure 1. The Conceptual method of research RESULTS AND DISCUSSION For the variable, the value of the coefficient which has been determined is 0.822; therefore, all variables of availability of skilled evaluators, specific, and knowledge on and results feedback could cover 82.2% of the variance all together. The remaining 17.8% includes other effective factors on. The value of this coefficient is 0.07 for job satisfaction variable; therefore, the variable, directly, and the entire variables of availability of skilled evaluators, specific, knowledge on standard and results feedback, indirectly, become responsible for less than one percent of changes in job satisfaction; therefore, it could be said that in the society subject of study, the job satisfaction of is not significantly affected by their. The amount of this coefficient for the variable of personal capabilities promotion of the has become less than one percent. Therefore, the variable did not have many effects on promoting personal capabilities of the. The value of this coefficient for the variable of commitment towards the is Therefore, the variable of could take 37% of the changes in commitment towards the for itself. The remaining 63% included other effective factors on commitment towards the. The value of this coefficient for the variable of 2240

4 recognizing efficient forces and enthusiasm in participating in educational courses; too, is less than one percent, showing that those variables are not significantly affected by and the variable of does not have significant effect on those variables. According to the results obtained from t-test, all loading factors have become significant in 99% reliability level and played their shares in significance in their measurement structures. Therefore; the results obtained from loading factor confirms the high reliability of the model. Tables 3, 4 and 5 have summarized all measurement equations and path coefficients. - Study the reliability coefficients, variance average as determined and correlation coefficients Job satisfaction of in the Promotion of personal capabilities of Improve commitment of personnel towards Identifying efficient and capable forces in the Establishing friendly and sincere between and supervisors Increase in efforts of personnel for better of their duties Promotion based on merits/advantages Establishment of a fair system of punishment and rewards Feeling of peace and justice in Progress and personal growth of personnel in the Optimized use of mental capabilities and talents of Coordinating mental and physical forces Using potentials of the Discovering hidden talents of personnel and their flourishing Improvement of problem solution skills in Balance between behavior, speech and command on emotion and feelings of personnel Pioneering in job activities and solving al problems Individual s sensitivity towards work issues Performing duties and activities in the framework of legal criteria On time presence of in work place Withdrawal from office and al violations On time of duties by Selecting advantage people for al position Potentials and talent realization of people Increase in responsibilities shouldering Basis for assigning power to Establishing suitability between knowledge and specialty and job place Distinguishing between efficient and 2241

5 enthusiasm in participating in educational course inefficient Weak and strong point of Efforts in increasing information and knowledge Necessity to appear in educational course rather than force Using effective methods and techniques in education Suitable planning for necessary educational course Have effects on Employees Evaluation 2242

6 Employee\; enthusiasm to participate in educational course Recognition of potential forces commitment towards Personal capabilities of job satisfaction Results feedback knowledge on Specific Availability of skilled evaluators Unobserved variables Tech J Engin & App Sci., 3 (18): , 2013 RESEARCH METHODOLOGY In order to analyze the findings of this research, SMARTPLS software has been used to assess the relationship among unobserved (hidden) variables of the problem. Due to the existence of serious correlation between explanatory variables that are used for data analysis and the research hypotheses tests, the partial least square (PLS) method has been used Table 1. Pierson correlation coefficient among research variables Availability of skilled evaluators Specific knowledge on Results feedback job satisfaction Personal capabilities of commitment towards Recognition of potential forces Employee s enthusiasm in participating in education courses One of the unobserved or hidden variables relations in the structural equations is based on association correlation. The association correlation is a non-directional relation between two variables in a model and its nature is assessed by correlation analysis. Table 1 shows Pierson coefficients for studying the relationship between variables in two-two form. Number one is placed on the main diameter of this matrix; that is, each variable is in full correlation with itself. Table 2. The extracted variance, total integrity, Cronbach Alfa and determined coefficients Unobservable variables Average variance extracted (AVE) CCR convergence Defining coefficient R Availability of skilled evaluators Specific knowledge on Results feedback job satisfaction Personal capabilities of commitment towards Recognition of potential forces Employee s enthusiasm in participating in education courses Cronbach Alfa Table 2 shows the validity and reliability indexes. The average variance extracted (AVE) for the validity is CCR coefficient and Cronbach Alfa for reliability. To calculate the convergence validity, Fornell & Larcker have recommended AVE 2 Criteria. In the AVE, the validity indexes have suitable convergence in minimum 0.5. That is, an unobserved variable is able to explain more than half of its indexes variances (observed variables) in average. Since in this research, the AVE index for all research variables is higher than 0.5; therefore, the validity of structural convergence of the model is approved. The highest variance average as determined was the job satisfaction variable and the least value was the variable of enthusiasm to participate in educational courses. The CCR convergence coefficient and Cronbach Alfa measure the validity and reliability of measurement tools. All variables mentioned above have coefficients more than

7 Observed variables Table 3. Results of loading factors for endogenous variables job satisfaction Establishment of communication and flexibility Attention to human forces Efforts in increasing knowledge Planning Coordination and supervision Decision making Observation of regulations and office disciplines Suitable behavior and approach to clients and colleagues Sense of responsibilities Creativity and innovation Division of work and creating motivation Establishment of friendly and sincere relations Improving efforts for better of their duties Promotion based on merits Establishment of just systems, punishment and encouragement/reward Feeling of peace and justice in Personal capacities of Personnel s commitment towards the Identification of capable forces enthusiasm in participating in the educational courses progress and individual growth Optimized use of individuals talents Coordinating mental and physical forces of Using potential talents of Discovering unobserved (hidden) talents of Improvement of problem solution in Balance between behavior and speech, and domination over emotions Pioneering in performing job activities Individual s sensitivity to work issues Performance of duties and activities in the framework of legal criteria On time presence of in work place Withdrawal from administrative and al violations On time of duties by and /or persistence Selecting advantage individuals to occupy al positions Manifestation of talents and potentials of individuals Increase in amount of responsibility acceptance of Basis of assigning authorizations to the Establishment of suitability between knowledge and specialty, and job status Distinguishing between efficient and inefficient Determining specialty weak points

8 of Efforts to improve information and knowledge Necessity to appear in the educational courses Employing effective methods and techniques in education Suitable planning for required educational courses Observed variables Table 4. Results of loading factors for exogenous variables Availability of skilled evaluators Specific Number of training courses passed by evaluators Proportionality of academic education of evaluators and evaluation Presence of sufficient and relevant experiences of evaluators and evaluation Amount of evaluators familiarity with work duties and responsibilities Amount of abilities to recognize of Observation of justice in evaluation Clarification and transparency of evaluation criteria and indexes Proportionality of and responsibilities Specification of time to perform duties in the Measurability of Acceptance of by personnel Information of Ability to determine the difference of in personnel by Agreement and participation of personnel in determining Notification and teaching in the beginning of the course Personnel s information on duties Personnel s information on duties Post-evaluation interview, after the evaluation Effects of evaluation results in physical aspect (salary, wages ) Effects of evaluation results in non-physical aspect (training, promotion Determining the strong and weak points of based on the evaluation results Amount of using the results of evaluation to solve work problems *All above-mentioned coefficients are significant in 99 percent reliability degree Results feedback To study the structure of questionnaire and discovering the constituent factors of each structure, the confirmed loading factor has been used. The results of loading factor of research structures are summarized in tables 3 and 4. The loading factors related to the research structures are all tested in the two levels of 5 percent and one percent. All loading factor are significant in 99% reliability level and has been able to establish significant shares in measuring relevant structure. Based on loading factors, the index with highest loading factor has more shares in structure measurement. Those coefficients are listed in the above diagrams. Suggestion With respect to the findings of the research, it is suggested to develop indexes based on job description as well as to develop indexes for the non-quantitative aspects of the job for each job and to notify them to the in the beginning of evaluation course as well as to develop an educational plan for evaluators. Definitely, following that program and making a proper and fair evaluation, the job satisfaction of - recognition of personal capabilities and identifying potential forces become possible, the educational needs are determined and the commitment of individuals is increased. Study research hypothesis Table 5, Answers to the research questions based on partial least square (PLS) 2245

9 Research hypothesis Table 5. Direct effects, statistic t and results of research hypothesis Coefficient Statistic t path (β) Results of researcher s hypothesis Existence of skilled evaluators ** Approved Specific ** Approved Personnel s information of ** Approved Results feedback ** Approved Evaluation of Job satisfaction of personnel Rejected Evaluation of individual capabilities of Rejected Evaluation of individual s commitment towards the ** Approved Evaluation of Identification of capable rejected Evaluation of enthusiasm to participate in Rejected courses **Significance in 99 percent reliability, *Significance is in 95 percent reliability REFERENCES Alizadeh M Pathology of Performance Evaluation System of Bahman Group Employees, Faculty of Accounting and Management, Allameh Tabatabaei University Baloch Haile College of commerce, University of the Punjab, Lahore, Pakistan. Brooking A intellectual capital, international Thompson business Press, London Caliskan NE The impact of strategic human resource management on al. J. Nav. Sci. Eng., 6(2): Castillo JJ Simple Random Sampling. Retrieved 12 10, 2011, from Experiment-Resources.com: Consulate General of Switzerland Pakistan banking sector, Retrieved from default/files/pakistanbankingsector2011.pd Demirci M The Effect of Motivation Tools On Employee Performance: An Application on an Automotive Company in Turkey, Master Thesis, Marmara University, Institute of Social Sciences. Dessler G Human Resource Management: The Strategic Role of Human Resource Management, Prentice Hall, Inc.: NJ, NJ. Don horvey and others.h.r.m,prentice-hall Farahni S Relationship between Evaluation System of Employees in the Improvement of Human Resources Performance in Iran Customs, Faculty of Accounting and Management, Allameh Tabatabaei University,p.105. Jerald G Behavior in, Prentice Hall. Kuvaas B Perceived investment in Employee Development, intrinsic Motivation and Work Performance, Human Resource Management Journal, 19(3), pp Miandoreh K.2003.Pathology, Management of Human Resources with Emphasize on evaluation System from the Viewpoint of Managers, Ph.D. Thesis in Public Management, Allameh Tabatabaei University, Tehran, P. 167 Moghimi, Salimi Comparative Management, Negah Danesh Publication, 1 st Ed. Spring Pp Regnant translated by Dr. Abbas Monavarian, Ketab Mehraban Publication, 3 rd Ed., P Shahzad K Impact of HR practices on the perceived of University teachers in Pakistan. Strategic Management of Human Resources, Michael Armstrong, translated by Dr. Seed Mohammad Arabi, Davood Izadi, Cultural Research Office Publication, 2 nd Ed Wayne F, Casio managing human resources McGraw-Hill, PP Yazıcı NK The Effect of Reward System Applications On Employee Performance In Service Sector. 2246