The Impact of Enterprise Resource Planning System of Human Resources on the Employees' Performance Appraisal in Jordan - WSEAS
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WSEAS TRANSACTIONS on ENVIRONMENT and DEVELOPMENT
DOI: 10.37394/232015.2021.17.35 Mohammadnour Aljarrah
The Impact of Enterprise Resource Planning System of Human
Resources on the Employees’ Performance Appraisal in Jordan
MOHAMMADNOUR ALJARRAH
Business Department
Middle East University
Amman
Jordan
Abstract: - The aim of this study is to determine the impact of Enterprise Resource Planning System of human
resources on the employees’ performance Appraisal in Jordan. It investigates the relationship between System
Quality, Information Quality, Service Quality, User Satisfaction; and Performance Appraisal. The study was
motivated because most of the literature about ERP systems in Jordan has focused on the success and failure
factors of the ERP systems. Jordanian National Electric Power Company (NEPCO) was chosen to conduct the
study because it has implemented a new electronic performance appraisal system based on the ERP system. Data
were collected via questionnaires from 98 managers and department heads working at Jordanian National
Electric Power Company (NEPCO). The results of this study revealed that there is a significant effect of System
Quality, Information Quality and User Satisfaction of Enterprise Resource Planning System on Performance
Appraisal, while Service Quality has no effect on Performance Appraisal. Therefore, the important
recommendation is to improve the service quality of the system and to bring encouragement and confident to the
users towards the success of the system.
Key-Words: - ERP System, System Quality, Service Quality, Information Quality, User Satisfaction,
Performance Appraisal, Jordan, NEPCO.
Received: October 31, 2021. Revised: April 1, 2021. Accepted: April 7, 2021. Published: April 14, 2021.
1 Introduction the organization, Contributes to the improvement of
Organizations seek to improve the quality of the the supervision and direction of the managers and
services provided and to add value through their heads [3]. Effective performance evaluation must
resources. Human resources are one of the most have a set of characteristics to achieve its desired
valuable resources in the organization. The subject objectives and the most important are: it should be
of evaluating the performance of employees has periodic and continuous to compare previous and
received great attention and many researches have current results, the principles and mechanisms
been done to find solutions to its problems. Several governing the evaluation process should be clear,
methods have been used to evaluate the depends on sufficient, accurate and up-to-date
performance of employees in order to improve information.
performance and raise the level of work to match Therefore, the importance of the
the work components and achieve the objectives of information required to evaluate the performance of
the organization [1]. Performance appraisal refers to employees has emerged. Information systems and
"the methods and processes used by organizations to communication technology has significantly
assess the level of performance of their employees improved the quality of human resources
and to provide them with a feedback" [2]. management and services [4]. Enterprise Resource
The organization can achieve a range of Planning Systems (ERP) has an important impact on
benefits by assessing the performance of its increasing the effectiveness of organizations
employees. The results provide a feedback on the through the preparation of the plans and strategies of
performance of each employee in the organization the organization, the prediction of human resources
where each employee knows the fact of his positive needs, career planning and promotions, the
or negative performance and thus generate a motive preparation of reports on human resources [5]. Thus,
to improve his performance, Contributes to it is relevant to determine the impact of ERP system
motivating employees when they realize that their of human resources on the employees’ performance
efforts in carrying out their duties are appreciated by Appraisal in Jordanian context.
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Investigated the role of ERP Systems in
management control systems and firm
performance. The results reveal that the use of
2 Literature Review ERP Systems supports the organization
performance. [14] Focused on the impact of
2.1 ERP Systems ERP Systems on job performance. The
Many organizations have used ERP systems to researcher found that ERP Systems have a
optimize the coordination between the various positive relationship with task productivity and
functions in the organization and to facilitate
innovation, management control and customer
communication and processing of all processes.
ERP systems are "organization-wide and integrated
satisfaction. The interaction of ERP Systems
information systems that can be used to manage and with management control has a significant
coordinate all the resources, information, and effect on the organization performance [15].
functions of a business from shared data stores" [6]. A case study from a transition economy in
ERP systems is smooth and flexible, providing Romania revealed that the interaction between
many solutions to manage all the organization's context variables (organizational strategy,
resources including procurement, sales, accounting, organizational structure, organizational control
storage, warehousing and human resources [7]. ERP system, people and business environment) with
systems contribute to improving the performance of ERP Systems has a significant impact on
the organization in the technical, operational and organizational performance [16]. [17] focused
strategic aspects. The integration of processes into a in his study on the effect of ERP Systems
single application helps the company to raise the
implementation on the firm long-term
level of work efficiency throughout the company,
improve the productivity, work flexibility and performance. The use of the Human Resources
customer response [8]. Information System (HRIS) leads to improve
the planning of human resources and for more
2.1 Performance Appraisal effective identification of training needs of staff
The organization has many resources to improve the [18]. Employees’ performance can be improved
performance levels, including human resources, through the use of ERP Systems by improving
which is one of the pillars of the progress and computer self-efficacy, organizational support,
growth of the organization. The process of and training [19]. [20] Presented a conceptual
evaluating the performance of employees is one of framework for examine the impact of ERP
the important operations exercised by human Systems on the end user satisfaction. The
resources. Through the process of assessing the researcher found that the content, accuracy,
performance of staff, the organization is able to
ease use, format, and timelines as the
judge the policies of recruitment, training programs,
development and follow-up of human resources [9]. independent variables of the ERP have positive
Performance appraisal helps to achieve satisfaction impact on user satisfaction.
among employees and enhances their trust in the ERP Systems provides many benefits to
organization and work towards achieving its goals enterprises, some of these enterprises have been
[10]. The evaluation process helps to find a variety able to take advantage of the advantages of
of ways to develop employee’s behavior and these systems, while some others faced
develop their functional environment. The challenges in obtaining the benefits of the
evaluation process contributes to the adoption of system. For example, many manufacturing
many decisions related to promotion, transfer, companies got the benefits of the ERP Systems
salaries, wages, recruitment, and planning of human by redesigning the job processes and increasing
resources [11].
the employees’ satisfaction, while others have
faced some challenges in benefiting from the
2.2 ERP Systems & Performance Appraisal
ERP Systems have facilitated human resource implementation of the system [11].
processes and increased decision-making
efficiency [12]. The organizational impact of 2.2 ERP Systems in Jordan
ERP Systems has a significant effect on human Many researchers have examined the use of
resources productivity and innovation [13]. [6] ERP systems in Jordan. [21] Examined the
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managers’ satisfaction of the ERP systems use how NEPCO can improve the process of
in Jordan. The study revealed that perceived performance evaluation.
usefulness, perceived ease of use; operational
improvements, system quality, and information 2.5 Research Model and Research
quality were significantly related to managers’ Instrument
satisfaction. ERP systems can play a great role The research model is based on Delone and
in the accounting practices in Jordanian McLean (2003) IS success Model. [33] Is
companies [22]. Human resources as a part of considered the most validated and simple model
ERP systems have a real level of usage in used to measure IS success [34-39]. Figure 1
Jordanian public industrial firms [23]. shows the components of Delone and McLean
The success in the implementation of ERP (2003) IS success Model. The proposed
systems has some critical factors. In order to research model is shown in figure 2.
explore the critical success factors for ERP
systems implementation in Jordan, [24] found
that top management support, user training,
interdepartmental communication and
interdepartmental cooperation are the most
important success factors for ERP systems
implementation. On the other side, [25] in his
study about the ERP systems implementation
failure revealed that Poor project management
effectiveness, unclear concept of the use of ERP
systems and users’ resistance to change are the
main failure factors for ERP systems
implementation in Jordan.
Organizational factors (organizational Figure1 DeLone and McLean (2003) IS Success
objectives and services, organization culture, Model
business process) and technological factors
(technological infrastructure and network and System
communication technology) have a significant Quality
correlation with the success implementation of
ERP systems [26]. Other studies have been
conducted about the success and failure factors Information Performance
Quality Appraisal
of ERP systems in Jordan [27-32].
Much ERP literature has pointed out the
importance and the benefits of these systems in Service
facilitating and improving the organizational Quality
and individual performance [13, 14]. Limited
researches have been conducted on the impact User
of ERP systems on the performance evaluation Satisfaction
[11]. Most of the literature about ERP systems
in Jordan has focused on the success and failure
Figure 2 The Research Model
factors of the ERP systems [24-26]. This paper
examines the impact of ERP systems on the
Based on the research model, the following
employees’ performance evaluation using a
hypotheses are formulated:
case of Jordan National Power Company
H1: ERP System Quality will have positive
(NEPCO). This paper aims to answer specific
effect on Performance Appraisal.
questions on what is the effect of ERP systems
H2: ERP Service Quality will have positive
on the employees’ performance evaluation and
effect on Performance Appraisal.
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H3: ERP Information Quality will have positive (EMP), and
effect on Performance Appraisal. Attitude/Commitment to
H4: ERP User Satisfaction will have positive user involvement (ATT),
effect on Performance Appraisal. Competence (COM).
Users’ The system meets and [41] [52-
Satisfaction exceeds user needs and 54]
A survey questionnaire was developed and
expectations, the system
the research targets were all mangers and helps user to do his job
department’s head that perform the performance with minimal time and
appraisal process based on the ERP system. The effort, the system is
questionnaire of this study was prepared in effective and useful for
English language, but it was translated into user, in general the user
Arabic, where the study is applied in Jordan and is satisfied with the
the official language in Jordan is Arabic system.
language and the participants in the study may
not have the ability to correctly understand the
questionnaire in English language. As this
research is carried out using questionnaire, 5 3 Results
point Likert scale was used in this research to To inspect the relationship between study
explore the respondent’s perceptions on a wide constructs, Correlation analysis was conducted
range of cause and effect relationships. NEPCO using Pearson correlation analysis. The results are
was chosen for this study because it has shown in table 2 that the correlation coefficients are
implemented a new electronic performance between .683 and .814 which means that there is a
positive correlation among variables. Table 2
appraisal system based on the ERP system. In
summarizes the means, standard deviations and
order to get precise subjects for the study and alpha coefficients for all study variables.
obtaining data relevant to ERP system and
performance appraisal, the Purposive sampling standard
was used to collect data in this study. A total of SQ IQ Srv_Q SAT PA Mean deviation
108 questionnaires were distributed, 103 were
SQ 1 .683 .752** .764** .771** 4.20 .624
**
returned, and 98 were valid.
IQ 1 .748** .787** .774** 4.16 .647
The measurement of the research proposed
model is defined based on the dimensions and Srv_Q 1 .725** .715** 4.12 .471
measures used in relevant identified literature. SAT 1 .814** 4.17 .652
Table 1 shows the measurement of the collected PA 1 4.11 .478
information. ** p ≤ 0.01 (correlation is significant at the 0.01
level (2-tailed)
Table 1 Measurement of the collected information
Variables Measurement Items Main
Source/s
System Ease to Use, Reliability, [33] [40- 3.1 Factor Analysis
Quality Flexibility, Accessibility, 43] All variables were examined for validity
Searchability, and testing; KMO and Bartlett’s test of sphericity
Interaction. were used. The results prove valid and thus
Information Accuracy, Consistency, [40] [44- found appropriate to start the factor analysis.
Quality Reliable, Objective and 47]
Table 3 presents the measure of sampling
believable, Useful and
helpful, Up to date, adequacy.
Understandable and
clear, and Secure. Table 3 KMO and Bartlett’s test
Service (Reliability (REL), [41] [48- The Kaiser-Meyer-Olkin (KMO) Measure 0.828
Quality Responsiveness (RES), 51] of Sampling Adequacy
Communications Bartlett's Test of Sphericity 439.867
(COMM), Empathy Approx. Chi-Square
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Depen Indepen Adjus Bet Sig Suppor
df 55 dent dent ted a . ted
Sig. 0.000 Variab Variabl R2 (β) Hypoth
le e eses
To maximize the variable-factor SQ PA 0.703 0.3 0.0 H1:
correlation, principle components analysis and 45 00 Supp.
varimax rotation methods were used to analyze Srv-Q PA 0.504 0.2 0.1 H2: Un
39 items. The results show well-defined 41 97 Supp.
communality values, with all items exceeding IQ PA 0.601 0.4 0.0 H3:
0.679. The internal consistency of 39 items for 15 00 Supp.
this study exceeds 0.7 as a signal of a good SAT PA 0.631 0.4 0.0 H4:
Cronbach’s alpha coefficient. Table 4 illustrates 96 00 Supp.
the reliability statistics-Cronbach’s Alpha for
the reliability statistics.
Table 4. Reliability Statistics-Cronbach’s Alpha
4 Discussion
Variable Number of Items Cronbach's Alpha The objective of this study was to investigate the
SQ 6 0.870 impact of ERP system on Performance Appraisal.
IQ 8 0.829 The results show that there was a significant effect
Srv-Q 11 0.789 of System Quality on Performance Appraisal.
SAT 4 0.872
Results show that accessibility and flexibility
dimensions explain the most part of variance in
performance appraisal. This result appears to be
3.2 Multiple Regression rational since users will be more satisfied with
Multiple regression analysis was used to system, if they can access the system easily and the
investigate the proposed model by analyze the system can accommodate changes according to
relationships between System Quality, users’ needs. If the system is easy to use and there
Information Quality, Service Quality, User are not any difficulties to use it, then the users will
satisfaction, as the independent variables with be more willing to use the system. These results
Performance Appraisal as the dependent were consistent with [13, 20, 26].
variable. The ANOVA summary is presented in While on the other hand, service quality has
table 5. no effect on Performance Appraisal. These results
Table 5. The results of ANOVA test
were consistent with [41, 55]. This finding could be
explained in terms of that employees tend to have
Model Sum of df Mean F Sig
good knowledge of IT and computer aspects. In
Squares Square addition, the higher level of service quality in the
Regression 2.217 4 0.721 3.372 0.000 dimensions of (IT staff normally provide quality
Residual 20.407 94 0.206 services that do not need corrections later on and IS
Total 22.624 98 staff understands user specific needs and interests)
may lead that employees not depend heavily on IS
It is clear from the Table 6 that system department staff for help and assistance in dealing
quality, information quality and user with IS.
satisfaction have significant impacts at α ≤ 0.05 The results show that there was a significant
on the performance appraisal. On the other effect of Information Quality on Performance
Appraisal. The system must present information in
hand, the multiple regression clearly show that
such a way that it is interpretable, easy to
service quality is not positively associated with understand, easy to manipulate, and is represented
performance appraisal. Table 6 shows the concisely and consistently [41]. Users will be more
results of Multiple Regression Analysis. willing to use the system, if they feel that the
information is consistent and remains the same any
Table 6 Results of Multiple Regression Analysis time. These results were consistent with [14, 17,
56]. Finally, the user satisfaction has a direct effect
on Performance Appraisal. Results show that user
satisfaction exercise the higher explanatory and
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DOI: 10.37394/232015.2021.17.35 Mohammadnour Aljarrah
predictive power related to performance appraisal. [2] Van Dijk, D., Schodl, M.M., 2015.
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5 Conclusion Identification of Employee Performance
This study was aimed to investigate the effect Appraisal Methods in Agricultural
of ERP system on Performance Appraisal. Data Organizations Journal of Competitiveness.
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