PERFORMANCE APPRAISAL SYSTEM: POLICY AND REALITY IN THE HOTEL INDUSTRY

Abstract

Performance appraisal in hotels is expected to align employee behaviour with service standards, support employee development, guide reward decisions, and enhance retention. However, its effectiveness depends on employees perceiving the appraisal process as fair, evidence-based, and developmental. This study examines the gap between appraisal policy and employees’ experiences using cross-sectional data collected from 500 employees of 3–5-star hotels in the Coimbatore region, India. Data obtained through a structured questionnaire comprising 17 Likert-scale statements were analysed using descriptive statistics, PAS classification, Chi-square tests, multiple regression, and Categorical Regression (CATREG). The findings indicate that employees generally hold favourable perceptions of the appraisal system, particularly regarding its contribution to productivity, customer service, employee development, and organisational growth. Nevertheless, concerns over excessive scrutiny and appraisal-related conflict reveal a disconnect between formal appraisal policies and their implementation. Although 75.2% of respondents reported moderate to good perceptions of the appraisal system, hotel experience, total work experience, number of dependents, and number of children significantly influenced PAS scores. CATREG analysis further identified the number of dependents and hotel experience as the strongest predictors of appraisal perceptions. The study concludes that while performance appraisal policies are well institutionalised in the hotel industry, their success ultimately depends on transparent, fair, and developmental implementation. The findings offer practical implications for hotel managers seeking to strengthen appraisal practices, enhance employee acceptance and organisational commitment, and improve overall organisational performance.