THE ROLE OF PERFORMANCE APPRAISAL IN IMPROVING EMPLOYEES’ PRODUCTIVITY
ABSTRACT
This research studied the “role of performance appraisal in improving employees’ performance in an organization”. A study of First Bank of Nigeria Plc, Lagos Metropolis was conducted to further enlighten management that the attainment of organizational productivity begins with the employee’s performance measurement. Chapter one of this study introduced the topic stating the research problem, the purpose of the study which is aimed at examining, the evaluation of the role of performance appraisal in improving employee performance in an organization, it also included three research questions. Chapter two of this research work focused on review of different, relevant, current literature which is of important and to the research work. This literature focused on the solution problems, technique of staff appraisal which can be used to assess the development of an employee in an organization. The descriptive survey method was employed and a sample size of 190 respondents was selected using the survey method in the chapter three. The presentation, analysis of data collected and testing of hypotheses were calculated in chapter four using Chi-Square(X2), in other to know which hypotheses to reject or accept. Finally, the summary, conclusion and recommendation of the role of performance appraisal in improving employee performance in an organization were stated in the chapter five of this study necessary recommendation should be taking to ensure that performance appraisal is properly evaluated in order to increase the employee productivity in the organization.
TABLE OF CONTENTS
Title page..... ..... ..... ..... ..... ..... ..... ..... ..... i
Certification ..... ..... ..... ..... ..... ..... ..... ..... ii
Dedication ..... ..... ..... ..... ..... ..... ..... ..... iii
Acknowledgement ..... ..... ..... ..... ..... ..... ..... iv
Abstract ..... ..... ..... ..... ..... ..... ..... ..... ..... v
Table of Content ..... ..... ..... ..... ..... ..... ..... vi
CHAPTER ONE INTRODUCTION
1.1 Background of the Study..... ..... ..... ..... ..... 1
1.2 Statement of the Problem ..... ..... ..... ..... 4
1.3 Objective of the study ..... ..... ..... ..... ..... 6
1.4 Research Questions ..... ..... ..... ..... ..... 7
1.5 Research Hypotheses ..... ..... ..... ..... ..... 7
1.6 Significance of the Study..... ..... ..... ..... ..... 8
1.7. Scope of the Study ..... ..... ..... ..... ..... ..... 10
1.8. Limitations of the Study ..... ..... ..... ..... ..... 10
1.9 Definition of Terms ..... ..... ..... ..... ..... ..... 11
References ..... ..... ..... ..... ..... ..... ..... 14
CHAPTER TWO REVIEW OF RELATED LITERATURE
2.1 Meaning of performance Appraisal..... ..... ..... 15
2.1.1 Origin of Performance Appraisal ..... ..... ..... 16
2.1.2 Methods of Appraisal ..... ..... ..... ..... ..... 18
2.1.3 Objectives of Performance Appraisal ..... ..... ..... 20
2.1.4 Problems of Performance Appraisal ..... ..... ..... 21
2.1.5 Historical Background of Performance Appraisal 23
2.3 Purpose of Performance Appraisal ..... ..... ..... 25
2.4 Basics of Conducting Employee Performance Appraisals32
2.5 Systems of Performance Appraisal ..... ..... ..... 33
2.6 Responsibility for Appraisal ..... ..... ..... ..... 34
2.7 Requirements of Good Quality Employee Appraisal System ..... ..... ..... ..... ..... ..... ..... ..... ..... 35
2.8 Problems in Performance Appraisal..... ..... ..... 36
2.9 Current Trend ..... ..... ..... ..... ..... ..... ..... 37
2.9.1 Modern Appraisal..... ..... ..... ..... ..... ..... 37
2.9.2 Take Time To Think..... ..... ..... ..... ..... ..... 38
2.9.3 Important Things to be noted by the Evaluator 38
2.9.4 Qualities of Performance Appraisal ..... ..... ..... 39
2.10Training and Development ..... ..... ..... ..... 43
2.10.1 Training as a Tool for Staff Behavioural Improvement 45
2.10.2 How Training Enhances Organizational Objectives 46
2.10.3Managers Responsibilities in Performance Appraisal
Planning and Evaluation ..... ..... ..... ..... 47
2.11Employee's Responsibilities for Performance Planning 49
2.12Behaviour and Result ..... ..... ..... ..... ..... 50
2.13Motivation ..... ..... ..... ..... ..... ..... ..... 51
2.13.1 McGregor’s Theory X and Theory Y ..... ..... 51
2.13.2 Motivating Staff for Good Performance and To
Correct Performance Problems..... ..... ..... 52
2.13.3 Remuneration as a Motivational Tool ..... 54
2.13.4 How to Motivate Subordinate Using Concepts
Insight from Abraham Maslow..... ..... ..... 56
2.14Summary of the Related Literature Review ..... 58
2.15Historical background of Fidelity bank Plc ..... 58
References ..... ..... ..... ..... ..... ..... ..... 64
CHAPTER THREE RESEARCH METHODOLOGY
3.1 Research Design ..... ..... ..... ..... ..... ..... 65
3.2 Area of study …. …. ….. ….. ….. ….. ….. 65
3.3 Sources of Data ..... ..... ..... ..... ..... ..... 66
3.3.1 Primary Sources ..... ..... ..... ..... ..... ..... 66
3.3.2 Secondary Source ..... ..... ..... ..... ..... ..... 67
3.4 Population of the Study ..... ..... ..... ..... ..... 67
3.5 Sample Size determination and sampling Technique 68
3.5.1 Sample size Proportional allocation ….. ….. ….. 69
3.6 Instrument of the Study ..... ..... ..... ..... ..... 71
3.7 Validation of the Instrument of the Study ..... 71
3.8 Reliability of the instrument ….. ….. ….. ….. 71
3.9 Administration of the study Questionnaire ..... ..... 72
3.10Method of Data presentation and analysis …..….. 72
3.11Decision Rule ..... ..... ..... ..... ..... ..... ..... 73
References ..... ..... ..... ..... ..... ..... ..... 74
CHAPTER FOUR PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
4.1 Distribution and Return of the Questionnaire 75
4.2 Background Information of the Respondents 76
4.3 Presentation and Analysis of Data
According to Research Question. 79
4.4 Hypothesis Testing 88
CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1. Summary of Findings ..... ..... ..... ..... ..... 94
5.2 Conclusion ..... ..... ..... ..... ..... ..... ..... 96
5.3 Recommendations ..... ..... ..... ..... ..... ..... 97
Bibliography …….. ……… …….…….……. 99
Appendix I ….. ….. ….. …… …. ….. ….. 101
Appendix II ….. ….. ….. …… …. ….. ….. 102
Appendix III ….. ….. ….. …… …. ….. ….. 105
Appendix IV ….. ….. ….. …… …. ….. ….. 107
Appendix V ….. ….. ….. …… …. ….. ….. 109
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The study centered on the role of performance appraisal in improving employees’ performance in the organization. Employees are the most valuable assets in an organization and as such, the most dynamic of all the organization’s resources i.e. human resources.
Human resources of an organization should be given much or the desired attention from management. If the stated goals and objectives of an organization is to be achieved as stated or enshrined in the vision and mission statement of the corporate plan, the need for performance appraisal of the human resources is very necessary to achieve the stated objectives. Thus, motivation, leadership, communication, work restructuring, payment system (remuneration), and training and development may all be included in the issues which management needs to give desirable attention.
Employees should be evaluated and assessed on their respective job functions in line with the organization’s performance measurement indices. Such employee should be given proper training and promoted to handle higher challenges or tasks in the organization. Performance appraisal is one of the essential tools employed by modern organizations to achieve their broad organizational goals and objectives and for career planning opportunities, mobility, new tools of vocational specification and changes in status.
In sophisticated and well-managed organizations, performance appraisal is the single most important management tool. No other management process has much influence over individuals’ careers and work lives. Performance appraisal is the most powerful instrument that organizations have to mobilize the energy of every employee of the enterprise toward the achievement of strategic goals. Performance appraisals are directed towards employees’ behaviors and attitudes to achieve an acceptable outcome. Most especially in the employee’s job satisfaction. Employees want to see a change for the better in their place of work, they want to be skillful on their professions and have a wider knowledge of techniques which may be required in the future to meet anticipated future needs of the organization.
Often, performance appraisal is seen merely as a once–a-year drill mandated by the personnel department. However in companies and organizations that take performance appraisal seriously and use the system well, performance appraisal is an on-going process and not merely an annual exercise.
Through performance appraisal process the individual learns exactly how well he or she did during the previous twelve months and can then use that information to improve his or her performance in the future. In this case, performance appraisal serves as a purpose by making sure that boss’s expectations are clearly communicated.
Performance appraisal forces managers to confront those whose performances are not meeting the company’s expectations. Almost every organization believes in pay for performance. But how can pay decisions be made if there is no measure of performance?
Performance appraisal provides the mechanism to make sure that those who do better work receive more pay or pay rise.
Performance Appraisal is a periodic review or evaluation of an employee’s performance .It is the regular, formalized and recorded review of the way in which an individual is performing on his job. The jobholder’s immediate boss normally carries it out, although different approaches to performance appraisal are available.
Performance appraisal is the process of bringing about the changes in skills, knowledge and attitude of employees on the integral role in the creation of an effective work force. Hence, for an organization, it is an investment in the human resources for an expected high level of performance as the return on investment. (Karimu & Adeleye,2008: 17)
1.2 STATEMENT OF THE PROBLEM
Performance appraisal is a management tool which is helpful in motivating and effectively utilizing human resources. Assessment of human potential is difficult. No matter how well designed and appropriate the performance planning and appraisal system. A firm should maintain an effective human resources management (HRM) which is essentially for optimally utilizing creativity and attaining individual as well as organizational goal. The Leadership has to ensure proper integrations of various activities and harmonious functioning directed toward organizational goals. High motivation is essential for ensuring commitment of human resources to the given objective. For this reason human resource manager is faced with a lot of problems. Some of such problems are as follows;
· The ability of the human resource manager to cover assessment of the performance as well as potentials for the development, training and the positive and negative effect on the employees?
· The responsibility of the human resources manager to reveal if payment of productivity bonus and incentives in the organization motivate employees evaluation result by linking reward with achievement.
· The reliability of the data base management system to generate information for the growth of the employee as well as of the organization and suggesting appropriate person to take matching and career plans.
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