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Journal of International Academic Research for Multidisciplinary ISSN 2320 -5083 A Scholarly, Peer Reviewed, Monthly, Open Access, Online Research Journal Impact Factor – 1.393 VOLUME 1 ISSUE 11 DECEMBER 2013 A GLOBAL SOCIETY FOR MULTIDISCIPLINARY RESEARCH www.jiarm.com A GREEN PUBLISHING HOUSE

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Journal of International Academic Research for Multidisciplinary

ISSN 2320 -5083

A Scholarly, Peer Reviewed, Monthly, Open Access, Online Research Journal

Impact Factor – 1.393

VOLUME 1 ISSUE 11 DECEMBER 2013

A GLOBAL SOCIETY FOR MULTIDISCIPLINARY RESEARCH

www.jiarm.com

A GREEN PUBLISHING HOUSE

Editorial Board

Dr. Kari Jabbour, Ph.D Curriculum Developer, American College of Technology, Missouri, USA.

Er.Chandramohan, M.S System Specialist - OGP ABB Australia Pvt. Ltd., Australia.

Dr. S.K. Singh Chief Scientist Advanced Materials Technology Department Institute of Minerals & Materials Technology Bhubaneswar, India

Dr. Jake M. Laguador Director, Research and Statistics Center, Lyceum of the Philippines University, Philippines.

Prof. Dr. Sharath Babu, LLM Ph.D Dean. Faculty of Law, Karnatak University Dharwad, Karnataka, India

Dr.S.M Kadri, MBBS, MPH/ICHD, FFP Fellow, Public Health Foundation of India Epidemiologist Division of Epidemiology and Public Health, Kashmir, India

Dr.Bhumika Talwar, BDS Research Officer State Institute of Health & Family Welfare Jaipur, India

Dr. Tej Pratap Mall Ph.D Head, Postgraduate Department of Botany, Kisan P.G. College, Bahraich, India.

Dr. Arup Kanti Konar, Ph.D Associate Professor of Economics Achhruram, Memorial College, SKB University, Jhalda,Purulia, West Bengal. India

Dr. S.Raja Ph.D Research Associate, Madras Research Center of CMFR , Indian Council of Agricultural Research, Chennai, India

Dr. Vijay Pithadia, Ph.D, Director - Sri Aurobindo Institute of Management Rajkot, India.

Er. R. Bhuvanewari Devi M. Tech, MCIHT Highway Engineer, Infrastructure, Ramboll, Abu Dhabi, UAE Sanda Maican, Ph.D. Senior Researcher, Department of Ecology, Taxonomy and Nature Conservation Institute of Biology of the Romanian Academy, Bucharest, Romania Dr. Reynalda B. Garcia Professor, Graduate School & College of Education, Arts and Sciences Lyceum of the Philippines University Philippines Dr.Damarla Bala Venkata Ramana Senior Scientist Central Research Institute for Dryland Agriculture (CRIDA) Hyderabad, A.P, India PROF. Dr.S.V.Kshirsagar, M.B.B.S,M.S Head - Department of Anatomy, Bidar Institute of Medical Sciences, Karnataka, India. Dr Asifa Nazir, M.B.B.S, MD, Assistant Professor, Dept of Microbiology Government Medical College, Srinagar, India. Dr.AmitaPuri, Ph.D Officiating Principal Army Inst. Of Education New Delhi, India Dr. Shobana Nelasco Ph.D Associate Professor, Fellow of Indian Council of Social Science Research (On Deputation}, Department of Economics, Bharathidasan University, Trichirappalli. India M. Suresh Kumar, PHD Assistant Manager, Godrej Security Solution, India. Dr.T.Chandrasekarayya,Ph.D Assistant Professor, Dept Of Population Studies & Social Work, S.V.University, Tirupati, India.

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PERFORMANCE MANAGEMENT SYSTEM AS AN ASSURED REMEDY TO INEFFECTIVE DECISION MAKING IN ORGANIZATIONS: AN INVESTIGATION ON

HIGHER EDUCATIONAL INSTITUTIONS IN SOKOTO AND KEBBI STATES, NIGERIA

ABUBAKAR ALLUMI NURA* OSMAN NOR HASNI**

*Dept. of Technology & Operations Management, School of Technology Management & Logistics, College of Business,

University Utara Malaysia, Kedah, Malaysia **Dept. of Technology & Operations Management, School of Technology Management & Logistics, College of Business,

University Utara Malaysia, Kedah, Malaysia

ABSTRACT

One of the proven antidotes to one of the greatest impediments standing the way of

higher institutions of learning in the whole of Nigeria particularly Sokoto and Kebbi states

and which prevents them from competing favorably with their counterparts around the globe

as a result of inability to effectively decide, and confidently act on issues, is a sound

Performance Management System (PMS). This paper unravels how the variables are

associated to one another. A questionnaire was designed to dig out into the respondents view

on organization objective, employee development, employee satisfaction and effective

decision making using a structural equation modeling (SmartPLS) to analyze the data

gathered from (Waziri Umaru Federal Polytechnic Kebbi State, Kebbi State University of

Technology Aleiro, Shehu Shagari College of Education Sokoto, Sokoto State Polytechnic

and Usmanu Danfodiyo University Sokoto) five higher institutions of learning in Sokoto and

Kebbi states. Three hypothesized relationships were tested and the findings indicate that two

out of the three hypothesized relationships were supported and only one hypothesis was not

supported. The findings are discussed in the perspective of a sound PMS in higher institutions

of learning in Sokoto and Kebbi states, Nigeria.

KEYWORDS: PMS, Organization Objective, Employee Development, Employee

Satisfaction, Effective Decision Making

1.1 INTRODUCTION

In the contemporary world of today, the forces of globalization have forced

institutions of learning to commit resources (human and material) to be able to stand the ever

growing competitive world as competition remains a major issue in foreign affairs. To this

end, higher institutions of learning in the developed economies of Europe, America and some

parts of Asia have been placing strong emphasis on PMS (Frigo & Krumwiede, 2000).

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But, conventionally, the management and administration of higher institutions of learning in

Nigeria are distinguished by a bureaucratic based approach. The spotlight of the system in

Nigeria is on route regulation; total compliance with prescribed standards and rules; simply

put, what should and shouldn’t be done. With such spotlight on route, organizations

(especially higher institutions of learning) are oriented towards assessing input usage and

effectiveness of decisions on how much income, staff, student and amenities are deployed in

an institution, and if such deployment is in harmony with the stipulated rules and regulations.

The main performance measure therefore, is the amount of money used up and the number of

graduates produced that are by and large appraised in terms of the inputs consumed.

1.2 LITERATURE

PMS means setting performance expectations and goals for groups and individuals, to

channel their efforts towards achieving organizational objectives (Armstrong & Angela,

2002). In the opinion of Osborne and Gaebler (1993) Performance management depicts a

systematic process by which the organization involves its employees, as individuals and

members of a group, in improving organizational effectiveness geared towards the

accomplishment of organizational mission and goals. Thimmaiah (1984) argued that PMS as

it exists in government includes conventional apparatus such as budgetary exercise, annual

reports published by the Ministries/Departments, performance budgets and the outcome budget.

Osborne and Plastrik (1997), declare that Performance Management is an art of managing,

and the primary “vehicle” for accomplishing the most preferred results through employees at

all levels in the organization. Osborne and Plastrik (1997) further stressed that PMS provides

an opportunity for the employee and performance manager to confer developmental issues

and together work out a plan for realizing those issues. As far as this paper is concerned,

three constructs were used to measure PMS as provided by Pradhan, and Chaudhury (2012)

these are, organization objective, employee development and employee satisfaction.

1.2.1 PMS practices around the globe

The value of the procedure of PMS is an achievement of pecuniary as well as non- pecuniary

objectives, the development of skills and competencies of departments and their integration,

and the improvement of customer care and process quality (Waal, 2007). There is also sort of

substantiation that PMS is implemented in approximately 70% of firms in the US, Europe

and part of Asia, in many governmental departments and institutions (Silk, 1998; Marr and

Neely, 2003; Rigby, 2001; Williams, 2001; Speckbacher et al., 2003; Neely et al., 2004; Marr

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et al., 2004). It has been argued that companies and institutions who have implemented a

sound PMS perform better than companies that do not use it (Hronec, 1993; Lynch and

Cross, 1995; Lingle and Schiemann, 1996, 1999; Kaplan and Norton, 1996; Rheem, 1996;

Atkinson et al., 1997; Armstrong and Baron, 1998; Lawson et al., 2003). Even though some

of these studies are not academically robust (are not so much grounded in thorough research)

as Bourne et al., (2000) neely and Bourne, (2000) Neely and Austin, (2000) Bourne et al.,

(2003) Neely et al., (2004) opinionated, they provide some meaningful insights about PMS

practice in organizations. It has been established that PMS brings along with it a lot of

advantages that are qualitative and quantitative in nature (Kourtit and André de Waal 2007).

From the qualitative perspective, it has been pictured that it brings about better understanding

of organizational members and the strategy (Lovell et al., 2002; Heras, 2004; Neely et al.,

2004). Dumond, (1994) Mooraj et al., (1999) Kald and Nilsson, (2000) added that PMS

brings about improvement in the decision-making Process. It is also incorporated that, higher

commitments of organizational departments to the organization add a lot of benefits to

organizational progress (Neely et al., 2004 & Bititci et al. 2004). More clarity of people about

their contribution towards achievement of the strategy and organizational goals also remain

an outstanding lead (Lawson et al., 2004; Neely et al., 2004; Papalexandris et al., 2004). In

the opinion of Sim and Koh, (2001) higher innovativeness and more pro-activity of

organizational members among others which invariably make effective decisions attainable

(Waal, 2002; Self, 2004). From the quantitative angle however, increase in revenue is indeed

assured in modern organizations (Malina & Selto, 2001; Sim & Koh, 2001; Waal, 2002;

Said et al., 2003; Braam & Nijssen, 2004; Davis & Albright, 2004; Neely et al., 2004;

Robinson, 2004) Increase in profit is another term that has been spotted as a very powerful

value addition brought to fore by PMS (Davis & Albright, 2004; Waal, 2002; Said et al.,

2003 Braam & Nijssen, 2004; Neely et al, 2004; Robinson, 2004). It has been opined that

reduction in costs is also an improvement that resulted through PMS ( Sim & Koh, 2001;

Neely et al., 2004).

1.2.2 PMS and agility in Higher institutions

Ashby sighted in Kravchuck and Schack (1996) posited that only complexity can absorb

complexity. Rigid information systems will not be able to apprehend and to understand rising

complexity in the environment without a sound PMS. The main connotation would be that,

PMS ought to be used for learning, and not just for accountability probing issues (Delancer,

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2008). PMS based accountability requires stability for the period for which targets are set.

Van Dooren and Thijs (2010) asserted that PMS dogma has a vague attitude towards

expertise and professionals (Kettl 1997). Davies and Lampel (1998), argue that managers

primarily used PMS in a tactical way, in order to intervene in what they describe as “doctor-

patient relationship”. Radin (2006) provides the example of the British Research Assessment

Exercise (RAE) which audited the research quality of higher institutions of learning based on

a number of performance indicators such as the number and type of publications. She asserts

that the most vigorous critique of PMS was on the standardized assessment that purportedly

did not leave enough room for teachers’ discretion.

1.3 PROBLEM FORMULATION

Higher institutions of learning in Nigeria, whether government owned or private, and

irrespective of national structures of finance and governance, are faced with a number of

challenges related to PMS and management of human resources which in variably affects the

effectiveness of their decisions (Idemobi et al, 2010). Indeed effective PMS in higher

education is an issue that has received significant thought of late, (O'Neill & Palmer, 2004;

Steyn & Schulze, 2003). This is perhaps so because there is a high demand for higher

education as greater part of the Secondary school certificate holders that are qualified for

admission to higher institutions of their choice could not do so because of ardent competition

at the approved conventional schools available. Reports indicates that no less than 1million

candidates apply for admissions in higher institutions of learning every year of which less

than 20% are offered places, due to lack of enough facilities (human and material).

Nakpodia (2011) argued that, PMS was habitual and nominal thus, the procedure viewpoint

of Human Resource Management was troubled with the techniques of handling personnel

problems and not understanding why the institutions are ill performing.

Esu and Inyang, (2009) opined that, higher institutions are ill performing in Nigeria because

of ineffective and inefficient performance management system. Again, in public sector, the

PMS of staff of executing agencies or public enterprises is limited to budget monitoring and

annual performance evaluation. Nonetheless, it has been contended that, there is no link

between organization performance and financial data (Pollitt & Bouckaert 2004). The need

therefore for organizations particularly higher institutions of learning to give sufficient

attention to PMS reviews to attain effective decision making becomes very imperative.

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In essence the productivity of an organization is jointly determined by the effectiveness of its

decision and a robust PMS with which the organization exploits to successfully attain its

stipulated objectives. As it were therefore, one can conceive of an effective decision making

terms by weighing how sound an organization’s PMS is, within given and stated constraints

in an organization which is otherwise known as the organizational dilemma (Ouchi, 1981). In

view of the above, the following paragraph wraps up the problem.

1.4 PROBLEM STATEMENT

Performance management system as an assured remedy to ineffective decision making in

organizations: an investigation on higher educational institutions in sokoto and kebbi states, nigeria.

1.5 OBJECTIVES

Major objective

To examine why some higher institutions in Nigeria are ill performing

Subsidiary objectives

1. To assess the relationship between Organizational objective and effective decision making

2. To examine the relationship between employee development and effective decision making

3. To examine the relationship between employee satisfaction and effective decision making

1.6 HYPOTHESES

1. There may be a positive relationship between Organizational objective and effective

decision making in higher institutions of learning in Sokoto and kebbi states

2. There may be a positive relationship between employee development and effective

decision making in higher institutions of learning in Sokoto and kebbi states

3. There may be positive relationship between employee satisfaction and effective

decision making in higher institutions of learning in Sokoto and kebbi states

1.7 POPULATION

All the departments and units of Waziri Umaru Federal Polytechnic, Kebbi State; Kebbi State

University of Technology Aleiro; Shehu Shagari College of Education Sokoto; Sokoto State

Polytechnic and Usmanu Danfodiyo University Sokoto comprise the targeted population. The

total population reads all the departments and units of the five selected higher institutions of

learning in Sokoto and kebbi states.

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1.8 RESEARCH DESIGN

This paper focused mainly on Performance Management System adoption and effective

decision making in higher institutions of learning in Sokoto and kebbi states, Nigeria. The

nature of study is more of a fact finding. Thus, this study pursues descriptive study design as

its map of action.

1.9 SAMPLING

The paper however adopted Systematic probability Sampling technique. Systematic sampling

is a statistical method involving the selection of elements from an ordered sampling frame.

The most common form of systematic sampling is an equal-probability method, in which

every kth element in the frame is selected, where k, the sampling interval (sometimes known

as the skip), is calculated as

Where n is the sample size, and N is the population size. This is one of the methods that have

been used. Using this procedure each element in the population has a known and equal

probability of selection, twenty (20) departments/ units were however selected in that order.

1.10 INSTRUMENT

A single instrument was used for data collection which was designed on 7-point Likert scales

to measure the various variables. To check response bias, a variety of items even within the

same construct group were randomized. The study did content and construct analysis by

making use of extensive literature and previously validated constructs. It establishes further

the incorporation of the representativeness of the items in the questionnaire for adequate data

collection.

1.11 ANALYSIS AND RESULTS

As earlier stated, this study used Smart PLS to estimate the study model. The first step

usually undertaken in this type of analysis is the assessment of measurement model. In doing

this, two main strategies are involved i.e. reliability analysis and validity tests. For the

former, convergent validity assessment is done and composite reliability and average

variance extracted (AVE) are as well reported, the latter on the other hand presents the

discriminant validity assessment of the items used to determine whether the items actually

measure what they were set to measure.

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The second step deals with evaluation of the structural model. Structural model evaluation

concerns the test of hypotheses and decisions based on t-values and corresponding p-values

of each relationship. As far as this study is concerned however, the decision on the

acceptance or otherwise of the study hypotheses was based on 10% level of significance (0.1).

These steps were discussed sequentially beginning with the convergent validity in 1.11.1.

1.11.1 Convergent Validity

The convergent validity results in the table 1 shows the convergent validity test for the entire

construct having a strong loading of 0.7 and above. Hence, the number of items arrived at per

construct are: OO (2 items); ED (3 items); ES (4 items) and DS (3 items).

Table 1Convergent Validity

OO ED ES DS

OO1 0.783 0.338 0.321 0.286

OO2 0.826 0.361 0.334 0.380

ED1 0.331 0.926 0.304 0.403

ED2 0.259 0.946 0.289 0.365

ED3 0.305 0.878 0.362 0.299

ES1 0.388 0.116 0.834 0.437

ES2 0.461 0.340 0.868 0.392

ES3 0.340 0.229 0.821 0.375

ES4 0.290 0.378 0.746 0.407

DS1 0.369 0.512 0.377 0.896

DS2 0.343 0.515 0.427 0.920

DS3 0.327 0.522 0.462 0.884 Note: the bolded and highlighted values identify items that belong to one construct

1.11.2 Composite Reliability and AVE

To be able to determine the validity and reliability of the constructs, composite reliability and

the AVE for each of the constructs was shown in Table 2.

Table: 2 Composite Reliability and AVE Variable Composite Reliability AVE

OO 0.820 0.551 ED 0.860 0.675 ES 0.820 0.670 DS 0.840 0.632

The four variables in table 2 shows composite reliability values of 0.80 and above which

according to Hair et al. (2010), are very good and indicates complete reliability.

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1.11.3 Discriminant Validity

Table 3 below shows results of the discriminant validity analysis of the scales that were used

in this study. It displays along the diagonal the square root of AVE for all the scales. They all

possess a value that is greater than the corresponding coefficients that are off the diagonals

which indicates an achievement of discriminant validity.

Table 3 Discriminant Validity

Variable OO ED ES SD

OO 0.7420 ED 0.5100 0.8218 ES 0.3400 0.5300 0.8187

SD 0.6000 0.4800 0.3400 0.7949 Note: the bolded values that appear in diagonals represent the square root of AVE and those

of the diagonals represent the squared correlations

The figure below, displays the research model.

Figure 1: Research Model

The research model depicted above displays the path relationship among the study variable

and factor loadings.

1.12 HYPOTHESES TESTING

This segment presents the results of the hypotheses testing. As shown in Table 4, all the

hypotheses that were accepted possess a p-value that is not greater than 0.50 and those that

were not supported have their values greater than 0.50. i.e hypothesis one that there may be a

positive relationship between Organizational objective and effective decision making in

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higher institutions of learning in Sokoto and kebbi states displays a t-value of 3.3, and a

corresponding p-value of 0.03 hence accepted at 10%. The second hypothesis that there may

be a positive relationship between employee development and effective decision making in

higher institutions of learning in Sokoto and kebbi states was not supported in this study

because it indicates a t-value of 0.45 and a high p-value of 0.65 thus could not be accepted at

the 10% that is the threshold for this study. The third hypothesis that there may be positive

relationship between employee satisfaction and effective decision making in higher

institutions of learning in Sokoto and kebbi states was also supported because the t-value

result is 1.97 and a p-value of 0.33, thus supported and accepted at the 10% level of

significance. Table 4 below provides the results of the test.

Table 4 Results of hypotheses testing

Variable relationship

Original Sample

(O)

Standard Error

(STERR) T Statistics

(|O/STERR|) P-value Findings OO -> DS 0.34 0.11 3.03 0.03 Supported ED -> DS 0.06 0.14 0.45 0.65 not supported ES -> DS 0.10 0.10 1.97 0.33 supported

1.13 DISCUSSION

The findings of this study clearly signify that, there is positive relationship between

organizational objective and effective decision making in higher institutions of learning in

Sokoto and kebbi states thus, the first hypothesis was supported. This perhaps tallies with the

views of Hronec, (1993) Lynch and Cross, (1995) Lingle and Schiemann, (1996; 1999)

Kaplan and Norton, (1996) Rheem, (1996) Atkinson et al., (1997) Armstrong and Baron,

(1998) Sim and Koh, (2001) Neely et al., (2004) and Lawson et al., (2003).

The second hypothesis “that employee development is related to effective decision making

was not supported. This is perhaps contrary to the findings of Kettl (1997) Davies and

Lampel, (1998) and Radin (2006), Kourtit and André de Waal (2007) who pointed out that

the advantages of employee development that are qualitative and quantitative in nature are

enough to drive organizations to successful accomplishment of objectives. This study wants

to argue here that if organizations develop their employees simply to simplify the attainment

goal and not along with employee personal growth, it will only incur expenses (Heath field,

2012; Pool & Pool, 2007).

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The third hypothesis that “ employee satisfaction is related to effective decision making “ was

supported as the research portrays this in fact is in line with the findings of Malina and Selto,

(2001) Neely et al., (2004) Bititci et al., (2004) who believed employee satisfaction leads to

commitment which lead to organizational progress in many aspects and effective decisions

are no exception.

1.14 POLICY IMPLICATION

The literature review and the findings of this research further establish that PMS is a needed

remedy to ineffective decision making in every organization particularly higher institutions of

learning regardless of motive. Akin to other industrial organizations, PMS is a pre requisite

to the educational institutions. Contextualizing the topic to the Nigerian scenario, in fact

shouldn’t have come any time better than now because over the years the manner in which

higher educational institutions are run is not favorable, partly due to excessive bureaucracy

and lack of effective PMS which invariably affect the effectiveness of decisions. Scholarly

views indicates that, improved skills and development, higher innovation, vision for career

planning, closer collaboration and better knowledge sharing and information exchange

between organizational units and overall effective decision making power are all achievable

through a sound PMS. The need therefore for a supportive effort from the authorities concern

such as Ministry of Education and even the legislative arm in terms of supportive policies

than can reap better outcomes and productivity in higher educational institutions in Nigeria is

not only necessary but an in evitable task.

1.15 CONCLUSION

This research work on performance management system as an assured remedy to

ineffective decision making in organizations: an investigation on higher educational

institutions in Sokoto and Kebbi states, Nigeria, affirms that higher institutions of learning in

Nigeria particularly in Sokoto and Kebbi states have lack of a sound PMS to blame for their

ineffective decision making ability and perhaps in ability to stand tall amidst counterparts

globally. The findings indicate that, two out of the three hypothesized relationships were

supported hypotheses and only one hypothesis was not supported. Issues on individual

objective and employee compensation as pointed out by other scholars as measures of PMS

could not be exhausted by this paper hence remain areas for further explorations. Again,

further studies need to be conducted across countries for generalization to be possible.

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