The Effects of Goal Orientation and Organizational Culture on Performance Appraisal of Employees

Abstract

The study aims to analyze the performance-prove goal orientation and organizational culture on employee work performance of performance appraisal by placing employee work motivation as an interning variable. The study was conducted on a quota sample basis with 134 employees and staff in educational institutions under the auspices of Islamic educational institutions in Banyuwangi, East Java, Indonesia. Analysis through structural equation modeling (SEM) was done, and results were obtined which showed that there is an influence of institutional culture on employee motivation and that there is an effect of employee motivation on performance appraisal. However, the statistical output showed that there is no significant effect of performance-prove goal orientation on employee motivation. In testing the mediating effect, the results showed the significant influence of employee motivation in bridging the relationship between organizational culture on performance appraisal, and performance-proven goals and performance appraisal. The theoretical contributions of the findings were in its examination of performance-prove goal orientation with motivational encouragement in educational institutions to analyze the extent to which an individual's self-confidence was able to integrate patterns in distinguishing the approach used, how to use, and the response to a specific situation of directing toward organizational achievement.

1. Introduction

As an educational institution as well as a religious institution, religious education institution is quite interesting to observe from various sides, not only because of its educational model, curriculum and teaching methods that are different from other formal educational institutions. Robbins & Judge (2008) stated that performance appraisal is a performance appraisal as a systematic evaluation to understand employee performance and employee abilities, so that companies can plan further career development for the employees concerned (Suryadi et al., 2019; Kusumaningrum et al., 2020). Companies often use this performance appraisal as the basis for salary increases, promotions, bonuses or as a basis for demotion and termination of employment (Munandar, 2001). Performance appraisal that is done properly and professionally can increase employee loyalty and motivation so that organizational goals can also be achieved as expected. The existence of high work motivation also has an impact on improving employee appraisal performance.

Employee motivation is the driving force that creates a person’s enthusiasm for work so that employees can work together effectively and are integrated with all their efforts to achieve performance appraisal. Motivation is a willingness to put forth a high level of effort for organizational goals conditioned by the ability of that effort to meet several individual needs (Robbins & Judge, 2008). Needs occur when there is no balance between what is owned and what is expected. Encouragement is a mental strength that is oriented towards meeting expectations and achieving goals. And goals are goals or things that an individual wants to achieve. Performance-prove goal orientation is part of the cognitive factors in motivation that become the driving force for individuals to approach and move away from an object. This means that goal orientation is a cognitive factor that must be possessed by every employee (Pintrich & Schunk, 2002; Schunk et al., 2012). Goal orientation affects the selection of activities in carrying out work tasks (performance) and the choice of approaches used in completing work (prove).

Performance-prove goal orientation of employees in the religious environment into a work area that has its own culture, an employee in one work unit positions as a sub- culture in the middle of a large culture, a work culture in general. In the work process in the religious environment, there are contact interactions and affiliations that are different from the work environment in a company or general educational institutions. This happens because the religious institutions adhere to its own paradigm which does not directly adhere to the demands of the times. In religious institutions, they also build their own social system, which can be likened to a miniature Islamic environment that is coveted. This means that organizational culture in Islamic educational institution has characterized Islamic life styles. With regard to this description, this study aims to analyze and test the effect of performance-prove goal orientation and organizational learning in the educational institution on performance appraisal through the motivation of employees in educational institutions in the religious institution environment.

2. Literature Review and Hypothesis

2.1. Institutional Culture on Employee Motivation

Culture is the total thought, work and work of humans, which are not rooted in their instincts, and therefore can only be triggered, by humans after going through a learning process. Riyanto (2011) explains that culture is the essence of what is important in an organization. Such as the activity of giving orders and prohibitions and describing something done and not done that regulates the behavior of members. So, culture contains what can be done or not so that it can be said to be a guideline used to carry out organizational activities (Hofstede et al., 2010).

Dessler (2015) explains that employee work motivation is a driving force for each employee to do their job properly, is also a factor that determines the difference between success and failure in many ways which is emotional energy and is very important for a new job. Dessler (2015) also explains that in essence the purpose of providing work motivation to employees is to change employee behavior in accordance with the wishes of the company; increase passion and morale; improve work discipline; improve work performance; increase the sense of responsibility; increase productivity and efficiency; and foster employee loyalty to the company. Based on the above understanding, it can be stated that work motivation is the driving or driving force in a person to want to behave and work actively and well in accordance with the duties and obligations that have been given to each individual.

H1: Institutional culture has a positive and significant effect on employee motivation.

2.2. Effect of Performance-Prove Goals on Employee Motivation

Pintrich & Schunk (2002) and Schunk et al (2012) provides an explanation of goal orientation as a goal or reason for someone’s actions in carrying out activities because they are driven by a goal or target or a celebration that must be achieved. Zhu et al. (2019) conveyed the idea of the characteristics or characteristics of performance goals as an indicator that can be used as an instrument for measuring behavior by having an assumption that every form of business or hard work is a competency that a person has is low, and people who have skill competencies do not need to do hard work. Moreover, trust, habit, assessment and level of satisfaction more in the notion that a person’s competence is a relatively stable character, therefore not everyone has the competence or expertise. Hence, evaluating and correcting every work done as a reference for improvement and comparing it with the work of others.

Schunk et al. (2012) provide a definite aspect of goal orientation by referring to actions that are focused, systematic, planned and lead to the goal of the results or achievements expected by someone. According to Byars, and Rue (2006), a person who has a willingness to work hard only when there are personal desires and hopes to be made into reality, that person will work more optimally if his wishes and expectations are expected to be fulfilled. The strength of an employee’s work motivation is to work which is directly reflected in the extent of his willingness and effort to complete the work in order to achieve better results and to support the goals of the organization in which a person works. Based on the description, it can be concluded that the performance-proving goal orientation of a person to behave with motivational encouragement in a certain manner with the aim of achieving competitive results or organizational achievements.

H2: There is a significant effect of performance-prove goals on employee motivation.

2.3. Employee Motivation and Performance Appraisal

Motivation is a series of attitudes and values that influence a person to achieve something specific in accordance with his or her individual goals. Attitudes and values principles are an invisible form that provides strength to encourage each individual to behave towards achieving goals (Mangkuprawira, 2002). This may imply that an employee who has higher education will usually be more easily motivated, because he or she already has broader knowledge and insight than an employee with a lower education. With this broader knowledge and insight, it will be easier for him to understand and understand and anticipate organizational developments and know what the organization needs.

Performance appraisal is a structured evaluation of an employee’s job and as a form of identifying and understanding the employee’s abilities, so that he can plan further career development for the concerned employee. It can also be said that this performance appraisal is assessing and evaluating the skills, abilities, achievements and growth of an employee. Mathis & Jackson (2006) explain that most companies use performance appraisals as a reference for salary increases, promotions, bonuses or as a basis for demotion and termination of employment. On the other hand, a performance appraisal that is done well and professionally will increase employee loyalty and motivation so that organizational goals can be achieved as expected.

H3: Employee motivation has a significant influence on performance appraisal.

2.4. Institutional Culture on Appraisal Performance Through Employee Motivation

Organizational culture is a pattern of basic assumptions that a group has found, determined, and developed through a learning process to deal with problems of adaptation to external groups and internal group integration (Wirawan, 1983). Culture is a social controller and regulator of the organization’s operations on the basis of shared values and beliefs, so that it becomes the norm for group work, and operationally is called a work culture because it is a guideline and direction for employee work behavior (Denison et al., 2004). Shared belief that underlies organizational identity, thus understanding how culture can provide an identity and direction for organizational survival (Kreitner & Kinicki, 2012).

Furthermore, Hasibuan (2012) explains that performance appraisal is a manager’s activity to evaluate employee work performance behavior and determine further policies. Likewise, in educational institutions under the auspices of Islamic educational institutions, evaluations or assessments of behavior that are studied are assessments of loyalty, honesty, leadership, cooperation, loyalty, dedication, and employee participation (Romi & Ahman, 2020; Hermawan et al., 2020; Mulyono et al., 2020). Based on the theory of the experts above, it can be concluded that organizational culture is the shared meaning of all members of the organization in relation to the motivational values, beliefs, traditions and unique ways of thinking they adhere to and appear in their behavior, in an effort to achieve the company’s stated goals. Organizational culture is essentially the foundation for an organization. Organizations can direct people to pay attention to one or two aspects related to the culture to be built by increasing motivational aspects of employee to increase their participation in involvement in the organization.

H4: There is an influence of institutional culture on appraisal performance through employee motivation.

2.5. Performance-Prove Goal Orientation on Performance Appraisal Through Motivation

Performance-prove goal orientation according to Elliot and Church (1997) and Darnon et al. (2010) are more directed in the form of self-actualizing or showing abilities, competences and comparing one’s self-competence with others. Pintrich & Schunk (2002) stated performance-prove goal orientation is described as a picture of the integration of a person’s self-confidence patterns that have an important role in distinguishing the approach used, how to use, and the response to a situation of achieving an achievement. Meanwhile, Byars and Rue (2006) explain that performance appraisal is a way of measuring the contribution of individuals in the organization. The important value of performance appraisal is related to determining the level of individual contribution to performance which is expressed in the completion of the tasks for which they are responsible. It is further explained that performance appraisal is also referred to as employee evaluation, performance review, and outcome assessment.

This means that performance appraisal is the process of evaluating performance, preparing development plans, and communicating the results of the process to the employees themselves. Performance appraisal is the result of a systematic assessment and is based on a group of activity performance indicators in the form of input, output, outcome, benefit and impact indicators (Riswanto et al., 2019b; Riswanto et al., 2019a; Riswanto et al., 2020; Soetjipto et al., 2020; Susilo et al., 2019). Elliot and McGregor (2001) provide an explanation that performance-prove goal orientation reflects a tendency for one’s motivation to compete and beat the abilities of others. It is further explained that performance-prove goal orientation leads to social competition, in which a person tends to compare his or her potential abilities with others.

H5: There is mediating effect of employee motivation between performance-prove goal orientation on performance appraisal.

3. Research Methods

3.1. Population and Sampling Techniques

In this study, the population of Ihya ‘Ulumuddin Islamic institution in Banyuwangi, East Java, Indonesia which owns and manages elementary, junior high, vocational and tertiary education institutions, with all teachers and staff or employees totaling around 864 employees. Sampling was carried out using non-probability through a quota sampling technique, which is taking sampling from each group of institutions on members of the population who are willing to be met during the research, and on the number required by researchers (Azwar, 2016).

Figure 1: Research Sampling

3.2. Data Collection

The data of this study used primary data which was taken through a Likert scale model research questionnaire with five closed answer choices. The data is distributed to each cluster according to the needs and sampling situation at the time of the research.

3.3. Data Analysis

The data analysis technique in this study used structural equation modeling (SEM) with the help of the IBM SPSS AMOS program. 18. According to Ferdinand (2006) and Ghozali (2008) the stages that must be passed in SEM are several steps by assessing the Model Development, validity and analysis of structural equation work.

4. Results

4.1. Model Development and Goodness of Fit

Model development which is the search or development of a model generated through literature review, because SEM does not produce causality, it is to justify the existence of theoretical causality through empirical data testing. The principle in SEM is to want to analyze the causal relationship between endogenous and exogenous variables, besides that it can simultaneously check the validity and reliability of research instruments.

Figure 2: Endogenous Variable Constructs

After the measurement model is fulfilled, then the analysis at the next stage can be carried out by construct validity tests to ensure that the indicator is a construct of the latent variables under study. This construct validity test is a test to ensure that the indicators have formed a unity in each latent variable construct.

Table 1: Validity Test

Table 2: KMO and Barlett’s Test

Table 3 shows the MSA value for each indicator with a construct score greater than 0.60 which indicates that the proposed indicator is reliable. The validity coefficient in the extraction matrix component of each indicator moves from 0.487–0.834, (> 0.30), so each indicator proposed in this study is classified as valid.

Table 3: Goodness of Fit Criteria

The KMO value is 0.911 (> 0.60), with a probability of 0.000 (< 0.05), which indicates that the proposed variable meets the eligibility requirements for the test, so that the analysis can be continued.

4.2. Analysis of the Path Diagram

The second step is a theoretical model that has been built describing a path diagram which will make it easier to see the causality relationship being tested. Furthermore, the path diagram shows the flow of the causal relationship between endogenous and exogenous variables.

The Chi-Square value of 285.596 with a probability of 0.000 (p < 0.01) indicates that the null hypothesis which states that the model is the same as empirical data is rejected, and it means that the model is not fit. The expected probability value is p ≥ 0.05 when using the 95% degree of confidence (Ghozali, 2008). This indicates that the null hypothesis is accepted and the predicted input matrix is not in fact statistically different. Chi-square is not the only test to assess the goodness of fit of the model, because this test has a deficiency in data size. If the sample size is small, the Chi Square test will show that the data are not significantly different from the model and the underlying theories. Hence, model measurements can be assessed with GFI, AGFI, TLI, and RMSEA.

4.3. Analysis of Structural Equation Work

The development and depiction of the theoretical models have been carried out in the path diagram, and then start converting the model specifications into a series of equations through a measurement model to explain the causal relationship between latent variables through confirmatory factor analysis and structural models.

The estimation results provide Chi Square value of 607.821 with p-value = 0.000. It appears that p-value is less than the level of significance (p < 0.05), which means that there is a significant difference between the sample covariance matrix and the population covariance matrix. In general, Goodness of Fit with a path analysis model is in Table 3.

Table 3 shows GFI as a measure of the accuracy of the model in producing the observed matrix covariant. According to Ghozali (2008), the GFI value ranges from 0–1. The closer to number 1, the model is declared the better. Most researchers use a minimum benchmark of 0.90 as a model parameter which can be said to be a good model. Adjusted Goodness of Fit Index (AGFI) in principle AGFI is the same as GFI, but adjusts the effect of degree of freedom on the model (Ghozali, 2008; Kaplan, 2000). The model is said to be good if the AGFI value is above 0.90. Meanwhile, the Root mean square error of approximation (RMSEA) measures the deviation of the parameter values of a model with its population covariance matrix. The RMSEA value < 0.05, indicates that the model is a close fit, while the 0.05 < RMSEA value < 0.08 indicates that the model is a good fit. The value of the Comparative Fit Index (CFI) is another alternative that can be used to assess a fit model or not is the Normed Fit Index (NFI) (Ghozali, 2008). This NFI was discovered by Bentler and Bonets (Ghozali, 2008). Bentler then revised the NFI to CFI (Comparative Fit Index) because NFI has a tendency to lower fit in small samples. The CFI value ranges from 0–1, while the model is considered fit if the CFI is greater than 0.9.

4.4. Hypothesis Testing

The results of the hypothesis testing analysis can be summarized in Table 3.

The results of the analysis showed that the critical ratio (C.R) value of 3.437 in the relationship between institutional culture and employee motivation with a probability of 0.000 (p < 0.05) indicates that institutional culture has an effect on employee motivation. The results of the test analysis indicate that the hypothesis that there is an influence of institutional culture on employee motivation is acceptable.

The results of testing the relationship between performance-prove goals and employee motivation also showed that the Critical Ratio (C.R) value of –0.668 with a probability of 0.504 (p > 0.05). This indicates that the performance-prove goals has no effect on employee motivation. The results of the test analysis indicate that the hypothesis which states that there is an effect of performance proves goals on employee motivation is rejected.

The testing showed the Critical Ratio (C.R) of 9.520 in relationship between employee motivation and job performance with a probability of 0.000 (p < 0.05). This indicates that employee motivation has an effect on job performance. The results of the test analysis indicate that the hypothesis that there is an influence of employee motivation on performance appraisal is accepted.

In the relationship among institutional culture on performance appraisal through employee motivation, statistical output also showed the Critical Ratio (C.R) of 4.538 with a probability of 0.000 (p < 0.05) indicates that the culture of the institution has an effect on performance appraisal through employee motivation. The results of the test analysis indicate that the hypothesis that there is an influence of institutional culture on performance appraisal through employee motivation is accepted. Furthermore, the output showed the mediating effect of employee motivation in the relationship between performance-prove goals and performance appraisal. The results showed the Critical Ratio (C.R) of 3.674 with a probability of 0.000 (p <0.05). This means that the performance of the prove goals affects the performance appraisal through employee motivation. The results of the test analysis indicate that the hypothesis which states that there is an effect of performance proves goals on performance appraisal through employee motivation is accepted.

Figure 3: Model Identification

Figure 4: Measurement of Model Fit

5. Discussion

The results showed the significant influence of the performance-prove goals on institutional culture through the motivation of employees in the educational environment. This provides an illustration that educational institution or a religious institution has provided their own culture with emphasis on its religious leadership by developing the quality of the education institution. In terms of the influence of performance-prove goal orientation and employee motivation, the results showed that the testing was not significant. The results of hypothesis testing as stated, also empirically showed that performance-prove goals do not affect employee motivation. It can be said that the possibility of different employee goal orientation may result in different work. Dietz et al., (2015) shows that employees with a performance-prove goal orientation have a higher performance appraisal level than employees with a low performance goal orientation. Employees who pursue mastery goals are more likely to seek challenges, use higher and more effective work strategies, including metacognitive strategies, more positive reporting and attitudes toward work, and have higher levels of achievement motivation in one’s ability to succeed in specific situations than people pursuing performance prove goals.

Table 4: Summary of Hypothesis Testing

Performance-prove goal orientation is described as a picture of the integration of a person’s self-confidence patterns that have an important role in distinguishing the approach used, how to use, and the response to a situation of achieving an achievement (Pintrich & Schunk, 2002). Two types of goal orientation are related to activities in performance appraisal and motivation, namely: mastery or learning goals and performance goals. Zhu et al. (2019) stated that these types of mastery and performance show different ways of achieving success and different reasons for interest in work. Goal orientation is the reason why mastery goals are pursued with high motivation, not just performance goals (Robbins & Judge, 2008). Goal orientation reflects the type of motivation standard and the way individuals assess their own performance, success or failure in achieving goals (Puspitasari, 2013). Employees who have a different goal orientation in their work processes will have different views on the situation for achievement. In this study, the theoretical considerations of performance-prove goal orientation can be used as the main theory. It can be differentiated into mastery goals and performance goals which have a different effect on employee motivation to achieve their goals (Pintrich & Schunk, 2002).

Hasibuan (2012) stated that a person works because he wants to meet his needs. The desire for one person to another is different so that human behavior tends to vary at work. Motivation refers to a process of influencing individual choices for various forms of desired activity. Work motivation can be seen from the responsibility in doing work; achievement of results or achievements, an attitude of independence, and efforts to develop their potential. However, frequently, someone’s work motivation does not appear even though a person has shown an independent, responsible, work attitude because the goals of his work achievement are determined by others or a low performance-prove goal orientation (Munandar, 2001; Robbins & Judge, 2008) explains that motivation is a person’s willingness to make a high effort with organizational goals that are conditioned by a person’s ability in his efforts to fulfill some of his probable needs.

6. Conclusion

The analysis through structural equation modeling (SEM) showed that there is an influence of institutional culture on employee motivation, indicated by CR of 3.437 and p = 0.000 (p < 0.05). It also obtained the significant results of employee motivation on performance appraisal, indicated by the value of CR of 9.520 and p = 0.000 (< 0.05). However, the results were not empirically able to show the significant effect in the relationship between performance-prove goal orientation on employee motivation. In terms of mediating effect, the results showed the mediating effect of employee motivation in the relationship between organizational culture and performance appraisal, and performance-prove goals through motivation and performance appraisal.

In summary, the results provided the empirical evidence the performance-prove goal orientation and organizational learning Islamic educational institution through employee work motivation with performance appraisal. However, performance-prove goal orientation did not affect employee motivation, while organizational culture had an effect on employee motivation. Theoretically, this study also empirically proves that employee work motivation has an effect on performance appraisal. The performance- prove goal orientation in this study is the cognitive factors possessed by employees that illustrate the integration of their belief patterns so that they can distinguish between the work approaches used, how to use them, which lead to various ways of responding to achievement situations that foster motivation. Goal orientation is an orientation that represents motivation to develop, achieve, or demonstrate competence.