Resumen
Purpose The objective of the study is to investigate whether the performance appraisal system used is in Majan Electricity Company, (Oman), measures the employees? performance accurately and to ensure motivation and satisfaction of its employees.Design/methodology/approach The study was conducted with 106 employees from all the departments of the main office of the company located at Sohar, who were selected on stratified random sampling basis and were contacted through a well-defined questionnaire. Findings The study reveals that even if there is a problem with the accuracy of performance appraisal system in measuring the performance accurately, or due to rater error in the evaluation process, the employees? performance appraisal is not affected by them and has got positive impact on employees? motivation and satisfaction.Practical Implications The study demonstrates that there is a strong association between the (i) performance appraisal system and (ii) motivation of the employees and the employees? satisfaction. It is also found that there is no relationship between performance appraisal system, rater errors, and the accuracy of performance appraisal system.Social Implications Performance appraisal system is dependent on motivation of the employees and employees? satisfaction. So, there exists necessity for the company to pay attention towards motivating the employees through concentrating on increasing the satisfaction of the employees.Originality/value No study have examined the impact of performance appraisal system of the Majan Electricity Company in Sohar ever before considering employee?s motivation and the welfare of the employees in one hand and the management on the other, and it is first hand study of its kind.Research limitations/Implications The study was restricted to the main office of the company located at Sohar, Oman. The study could be extended to know the insight of the personnel involved in the entire Majan Electricity Company, Oman.