The purpose of this quantitative study is to identify the factors contributing in perverse perception about performance appraisal system. Furthermore it is a brief review of some relevant approaches which have been used for measuring performance in service sector organizations. It also describes the number of factors which may consider in deciding appropriate performance appraisal system for service providing companies in Pakistan. This quantitative research was conducted through the responses collected by Pakistani employees with the help of close ended questionnaire developed on Likert scale. Moreover recommendations are made to cope up with the perverse perception among employees for performance appraisal system and to introduce performance management system for service providing companies in Pakistan.
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