Performance appraisal is simply defined as an assessment of individual that rated by the manager (Venclova et al 2013). Broadly, performance appraisal can be a system of the job performance that the employee has to be assessed to understand the employee professionalism (Taher 2013). Objective of the performance appraisal is described by Kirner (2006) that performance appraisal should be aligned with organisational goals and strategic plans that can become a tool to guide the employee accountable for the company goals through their performance behavioural. Performance appraisal is also known as to measure of how high or low the employee’s satisfaction that had been goes through based on the qualitative and quantitative analysis research method (Turk 2008 pp.40).
Successful or unsuccessful performance appraisal is depending on employee’s individual ethical assessments. According to Hawk (1994) ethic is one of the performance appraisal measurements with the supporting theory called Utilitarianism. Utilitarianism suggests that ethics is the best way to evaluate the employee performance with given CPM (Computerizing Performance Monitoring) method. Utilitarianism theory believe that the employee has implemented the ethical manner in organization is by serving a greatest good for a greatest number. It means that the business owner, customer and staff have to perform in a best interest of company that may benefit to all stakeholders (Hawk 1994 pp.949). There are also a few researches strongly suggest that ethical behavioural is integrated with performance appraisal. In theoretical perspective, researches examines ethical performance is really subjective, based on the nature and social cognition theory, rather than objectives fact. However in practical issue, ethical performances is very essential in organizations for a manager to improve employee’s ethics and also improving the understanding of the job performance in order to achieve organizations objectives (Selvarajan et. al 2009 pp.401).
Performance appraisal system in practical has been developed by the organizations to motivate and reward employee performance to achieve company goals (Swiercz et al.2012 pp.25). Consequently, according to Caruth (2008) states that performance appraisal role is very imperative in business process to meet the organizational needs (administrative, development, motivational and strategic) that have to benefit all the stakeholders (executives with strategic responsibility, employee, managers and shareholders). Performance appraisal could be resulted in a positive or negative outcome such as promotion, demotion,