Employee Motivation from Performance Appraisal Implications: Test of a Theory in the Software Industry in West Bengal (India)

The Software industry and its operation have attracted the concentration of a considerable number of researchers in the last decade, as the industry has proven its uniqueness in nature, operation, contribution to GDP and HR practice. The software industry is distinguished from other industries, by fast changing technology, quality conscious and multinational clients, stiff international competition and shortage as well as fast obsolesce of skill, although the success of IT companies depends on its’ talented and skilled workforce. As a result, measurement and management of performance of individual, team and the organization as a whole is a requisite. The paper tried to study the attitude of the employees’ of the software companies in West Bengal (India) towards performance appraisal. The paper has identified main consequences of appraisal from the previous literatures and tried to find out the effects of those end results on employee motivation towards performance appraisal. The exploratory paper, based on primary survey of 506 employee data collected from 19 software companies of Kolkata, the tier I region for the software industry in West Bengal. Data are analyzed using factor analysis, to find out the applications of appraisal, followed by a binary regression to understand their implications on the employee motivation. The study has found the importance of the line managers in the practice of the appraisal process also reviewed different dilemmas regarding appraisal practice and employee issues depending on company's size, business focus. The practice of appraising and its implications are also diverse in different companies throughout the industry.