University of Nigeria Research Publications

OHUEGBE, Veronica Uchenna

Aut

hor

PG/MBA/99/30434

Title

The Impact of Performance Appraisal on Employee Job Performance in

Organizations

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e

May, 2001

Sign

atur

e

TITLE PAGE

THE IMPACT OF PERFORMANCE APPRAISAL ON

EMPLOYEE JOB PERFORMANCE IN ORGANISATIONS

PRESENTEDBY

OHUEGBE, VERONICA UCHENNA

PGIMBA199130434

BEING A RESEARCH PROJECT SUBMITTED IN

PARTIAL FULFILMENT FOR THE AWARD OF MASTERS

IN BUSINESS ADMINISTRATION UNIVERSITY OF

NIGERIA ENUGU CAMPUS.

MAY 2001.

CERTIFICATION OHUZGRE, VERONICA UCHENNA, a. p o s t graduate student in the Department of Management wfth Peg. NO. PG/MBA/99/30434 h a s s a . t i s f a , t o r i l y c o n ~ q l e t e d the requ i rement for c o u r s e and research work for the award of degree o f Master of B u s i n e s s A d m i n i s t r a t i o n i n Management.

T h e work embodied i n t h i s project r e p o r t is o r i g i n a l and h a s not been submitted in p z r t o r f u l 7 for any o t h e r d i p l o m a or d e g r e e of t h i s or 2n;l

Project Supervisor

DATE

DEDICATION

TO

IHEE for his love.

ACKNOWLEDGEMENT I am particularly indebted and grateful to Almighty God, for His divine

guidance throughout the course of this iresearch. May all l iono~~r , glory and

adoration be given unto I-iini in Jesus name.

There are people who are the architects of my success in this research

work. Firstly my Project Supervisor - DR. E. K. Ikeagwu. t-le took pains to go

through this work. I am also grateful to Dr. U. J. F. Ewurum - the Head of

Department and my lecturer. May the Lord reword you all.

I am particularly grateful to my husband - Chyke I. Ohuegbe, my daughter

- Princess Makky for their support throughout my stay in this university. May God

bless them. I'm also thankful to my parents, brothers, friends and course mates

especially Mrs. N. Akudolu, Mrs. N. Uzor, Mr. Obi Obiora, Dr. Ike Onyenorah,

Ebelle Ozumba and others. May the Almighty God bless you all

Ohuegbe, Veronica Ucher~na

TABLE OF CONTENT TITLE PAGE

CERTIFICATION

DEDICATION

ACKNOWLEDGEMENT

TABLE OF CONTENT

ABSTRACT

CHAPTER ONE

1.1 INTRODUCTION

1.2 Histvies of Organisations under Study

1.3 Statement of Problems

1 4 Hypotheses

1.5 Scope and Limitation of Study

CHAPTER TWO

2.0 Review of Related Literature

2.1 Performance Appraisal Defined

2.2 Uses of performance Appraisal Information

2.3 Appraisal Methods

2.4 Problem of Techniques in Appraisal

2.5 Feedback as an Important Tool for Employee Development and Improvement

CHAPTER THREE

Research Methodology

3.1 Sources of Data

1

ii . . . Ill

iv

v

vii

3.2 Sample Size

CHAPTER FOUR

Data Presentation

CHAPTER FIVE

Testing Hypothesis

CHAPTER SIX

Interpretation, Meaning and Discoveries

CHAPTERSEVEN

Discussion of Findings and Conclusion

Conclusion and Recommendation

Bibliography

Questionnaire

vii

ABSTRACT This research work looks at "The lmpact of Performance Appraisal on

Employee Job Performance in Organisations". As a result of growth and the

complex nature of modern organisation's activities, there arises the need for the

export handling of the human resources who see to the smooth functioning of the

activities in these organisations. This call for the proper and adequate

implementation of performance appraisal programmes so as to enable the

organisation not only to function effectively but also to get the workers utilise their

efforts to achieve the organisational goals and objectives. Effective Performance

Appraisal, as it is believed, brings about increased Employee Job Performance in

Organisations; and in this contemporary time, enables an organisation to enjoy

an atmosphere devoid of industrial disharmony.

It is in response to the above that the study critically looked at the issue -

"The Impact of Performance Appraisal on Employee Job Performance in

Organisations. The purpose of the Study is to assess performance appraisal and

its influence on training in organisations so as to determine its impact on

employee job performance.

The methodology adopted for the study was the survey method. To carry

out the study, both primary and secondary data were made use of extensively.

Several functions were made in the course of this study. Firstly, that

adequate training which employees received after performance appraisal, <! , \ , '

resulted in the improvement in job performance of the employee?::Secondary,

feedback on job performance of employee after appraisal leads to enhanced

employee~~job performance. Thirdly, that properly organised and executed

performance appraisals influenced promotion of employees in organisations.

Finally that salary increment of the employees in organised and executed

perform&ce appraisals.

CHAPTER ONE INTRODUCTION

BACKGROUND TO PERFORMANCE APPRAISAL

One of the earliest formal reports on performance appraisal was that given a('. by Bass in 1965. He administered . .>- a$ set of small group exercise simulating

organisational problems in appraising and other indices of management. His

observation of difference in responses triggered off a v r d gundation sponsored

Cross National Studies employee in 1966. Since then the interest in employee

performance indices and application to personal development began in full force

worldwide.

Performance appraisal has been defined as the process by which

organisations evaluate employee performance by measuring and reporting

employee behaviour and accomplishment for a given period for the purpose of

improving jab performance. (Wherther and Davis 1985 p. 282).

Human beings are needed in all facts of business enterprise, be it

production, finance, or marketing. Just as in the management of other factors of

production, so also pers bahnust be managed effectively and efficiently so that 2: the organisation will achieve its goals.

The personnel manager must establish the fact that the new employee

possesses the skill and knowledge claimed by him. The periodic assessment of

the new employee performance confirms the original opinion formed when he

was employed for the job.

According to the Taylor, people should be carefully selected and be given

work that they can do best for them to perform well (Akpala 1990 p.18). He

insisted that systematic, rational and deliberate scientific approach should be

applied to the procedure of selecting, training and development of men and not

l u ~ b : intuition and past experience. He further devised the time study technique ./"

.' I

by which the period it takes ---- in&dverage worker to perform a function could be

determined and used as standard for judging individual worker's performance.

Performance is "the degree of accomplishment of the task that makes up

an individual's job" (Byars and Rue 1979 p. 345). It indicates how well the person

is fulfilling the requirement of his or her position on the basis of results achieved.

For many organisation, the sing!e most important personnellhuman

resources outcome involves the contributions that employees make to the gaols

of the organisation. These contributions are generally called employee

performance, meaning how effectively an employee carries out job

responsibilities" (Heineman, et al 1980 p.78). High performing employees

successfully meet their responsibilities and thereby make a contribution to the

objective of the organisation.

Performance of a worker according to Ejiofor (1981 p.7) is a function of

many related and interrelated performance (OP), is a function of three critical

variables namely:

The person working in the organisation (P). The organisation itself (0) and

the environment in which the organisation is operating (E).

\ Thus OP = F (P,O.E)

Each of these critical variables is in turn a product of other factors. The

performance of a person (Pp) is a function of

His ability, A

Motivation, M

And Integrity, I

Thus Pp = F (A,M,I)

The ability of a person Ap is in turn a function of Genetics G.

The person felt need, N

and the environment, E

Thus Ap = F (G,N,E).

Each of these in turn is a function of other determinants on motivation; the

motivation of the person (MP) is a function of:

The reward given by the Organisation R,

The value the individual attaches to the reward, V and

The instrumentality of the persons effort to reward, I

Thus MP = F (R,V,I).

The integrity of the person IP is determined by:

The value system of the person VP,

The value system of the society VS, and The reward given by his

organisation R.

Thus IP = F (Vp, Vs, R).

A feature of all these correlated is that their relationship is multiplicative. If

any of them has a low value, it lowers the performance of the person. If any has

a value of zero, the individual cannot perform at all, and if any has a negative

value the person performs contrary to the objective of his organisation, Ejiofor

(1 981, p.8).

McGregor (1972 p. 133) outlines three reasons for measuring employee

performance. They include:

1. To provide systematic judgement to back up salary increases promotions,

transfer and sometimes demotions or termination.

2. To provide a means of telling a subordinate how well he or she is doing

and suggesting needed changes in behavidur, attitude and skill or job

knowledge and letting the employee know "where he or she stands" with

.the boss.

3. To provide a basis for coaching and counselling of the individual by the

superior.

Employee performance involves certain common element of most

performance system. These include performance standards, performance

measures and rater biases, Wherther and Davis (1985 p.286).

Performance standards: performance appraisal requires performance standard.

They are the benchmarks against which performance is measured. To be

effective, they should relate to the desired result of each job. Knowledge of these

standards is collected through bob analysis.

Performance Measures: Performance appraisal also requires dependable

performance measures. They are rating used to evaluate performance. To be

useful, they must be easy to use and be reliable, and report on the critical

behaviour that determines performance. Performance measure can be made

directly or indirectly. They can also be objective or subjective. Objective

performance measures are those indications of jobs performance that are

Grifiable by others. Subjective performance measures are those ratings that are

not verifiable by others. Usually such measures are the rater's personal opinion.

Rater Biases: Bias is the inaccurate distortion of a measurement. It is usually

caused by the rater who fails to remain emotionally unattached while appraising

employee performance. The most common rater biases include personal

prejudice, the halo effect, the error of central tendency, the recency effect, the

leniency and strictness biases.

According to Rowland (1958 p.8), current performance of an employee as

it shows on the records may not necessarily indicate potentials. The next job up

the ladder may require new knowledge, different personal characteristics or a

different over-all out look. Hence there must be some kind of formal appraisal

that takes into account not only current performance but potential ability and

personal characteristics that may effect future performance of the employee. In

addition, areas in which the employee need development for better performance

should be apparent from the appraisal if it is conducted properly.

"Measures taken to meet the first objective of appraisal - better

performance on the job-will to a large extent further the second objective - a

reservoir of trained employee capable if assuming great responsibility". The

appraisal itself can be made a tool for the encouragement of greater efforts and

for insuring that attempts at improvement take the right direct. Rowland (1958,

p.9).

One primary purpose of appraised is to help the person appraised. For

this reason each appraisal must be followed by a counselling interview in which

the appraiser sits down with the appraisee and discusses the findings giving

praise where it is deserved and suggestion how weak points can be improved

and perhaps even outlining training program to be undertaken at a company's

expenses.

This insures that the individualgown efforts are directed towards the right ,-=-=-- .

gaol. If the employee does not know what is expected of him, he is scarcely likely

to know how he can show improvement.

Uses of performance appraisal include:

1. Performance Improvement: Performance feedback allows the employee

manger and personal specialist to intervene with appropriate actions to

improve performance.

2. Compensation adjustment: Performance evaluation help decision makers

. determine who should receive pay raises. Many firms grant part or all of

their pay increases and bonuses based upon merit, which is determined

mostly through performance appraisals.

Placement Decisions: Promotion, transfers and demotion are usually

based on past or anticipated performance. Often promotion are a reward

for past performance.

Training and development needs: Poor performance may indicate the

need for retraining. Likewise, good performance may indicate untapped

potentials that should be developed.

Career Planning and development: Performance feedback guides career

decision abort specific career paths one should investigate.

Staff process deficiencies: Good or bad performance implies strength and

weakness in the personnel department staffing procedures.

Information Inaccuracies: Poor performance may indicate errors in job

analysis information, human resources plans or other parts of the

personnel management information system.

Job design errors: Poor performance may be a symptom of ill-conceived

job designs. Appraisal help diagnose these errors.

The success or failure of performance appraisal in an organisation is

dependent upon the philosophy on which it is established; the attitude of

management and supervisory personnel towards it, and their skill is achieving its

objectives.

The importance of a performance appraisal programme is based on its

objectives. This study will examine the effects of performance appraisal on

employee job performance. And in so doing it will strictly focus on the feedback

and training aspects of performance appraisal.

According to Banjoko (1982 p. 31-34), the process of improving

employee's performance through the feedback system is illustrated of review

interview as consisting of additional clarification of expectation in terms of

performance standard and behaviours; coaching on. the job related problems;

and the discussion of individual employee's plan for self-development. The

performance review interview then leads to the mutual setting of specific

performance objectives and goals which in turns serves as a springboard for

growth and improved performance.

Fig. 1.1 FEEDBACK AND PERFORMANCE IMPROVEMENT MODEL

Source: Journal of the Institute of Personnel Management of Nigeria. VoI. 9 N0.2 Sept. 1982.

Clarification

Performance Standard

P

Review Performance Interview + Evaluation Feedback Coaching

Counselling

the Execution of individual '4 self development I plan

Goal Improved setting Performance 1

It is important however to emphasis that the link between feedback and improved a :'

performance ii'tllustrated ,, above does not imply a direct and positive relationship. &'. *'

As pointed out by Ilgen, Fisher and Taylor (1979 p. 349-371), the relationship is ? influenced by series of mediating variables, which include the subordinates

perception of the source of feedback information and the specificity of the goals.

lmproved performance of employee could be enhanced only with due

consideration of these intervening factors.

/..t.&L The performance appraisal system in Nigeria hav3,been characterised

with non-disclosure of appraisal results to the ratees. ~ x a ~ ~ a r e n t secrecy over

performance appraisal result has put in the hands of supervisors and managers,

a potential tool for cracking down a recalcitrant subordinate with impurity.

In the open reporting systems, appraisals have been argued to be

desirable in order to protect the subordinate against the prejudice of their

superiors that cannot be supported by facts. "And apart from safeguarding

subordinates against irrational and base evaluation, the feedback of the

performance rating results to the employees through the open appraisal system

has motivational impact". Without the feedback system the formal appraisal

technique might not be able to effectively enhance improvement in individual job

performance. With regards to the above arguments, this study seeks to examine

the extent to which the use of feedback on job performance of employee after

appraisal has improved employee job performance.

The concept, training has been defined in different ways by several

management practitioners, experts, writers and authors. According to Flippo

(1976 p. 209) "training is the act of increasing the knowledge and still of an

employee for doing a particular job". Byars and Rue (1979 p. 49) also defines

training as a process that involves developing skills and learning concepts, rule

or attitudes in order to increase effectiveness in doing particular jobs. According

to Gilbert (1967 p. 20-33) the goal of training and development programmes is to

remove performance deficiencies whether current or anticipated, that are result

of the employee's inability to perform at the desire level.

Jmmediately an individual joins an organisation the supervisor should

identify the skill needed for the task to be given and this can be done by giving

assignment case studies, appraising performance over a period of time etc. if the

workvr does not possess the necessary skill, remedial action should be taken.

For instance he could be sent on training.

Training is fast becoming an art as well as a science. This is due to the

advancement in knowledge, practice and technology. This training has become

much more sophisticated and resources consuming.

The importance of staff training to an organisation cannot be over

emphasised. It has its benefits both to the organisation and the individual. To the

organisation, having a well-trained staff also means that productivity and quality

are likely to be higher because employee a ble to work faster and more 3 accurately. This in turn results in less wastage of materials or time. A high quality

/g. ' product or a first-class service is likely to reduce complaintfo_c~stomer or, ,' /-'

more positively to raise the level of prestige of the organisafon. Everyone likes to

feel that tkey a r - competent at their job and training helps to give individual who

has undergone training greater personal satisfaction from the experience of

being able to perform a job well and from being able to exercise new skills,

techniques and procedures. This is usually the case when customers or clients

recognise and appreciate that expertise. This in turn, leads to an increased level

of confidence which often results in a raising of morale and team spirit and

people realise that they are making a valued contribution of the world of the

organisation.

The benefit of training felt and shared by both the organisation and

trainees can often develop enthusiasm towards the process of learning and

development. This may, in turn, help to create a "learning organisation that is

more flexible in dealing with and responding to present and future demands.

Poor performance of the employee may indicate the need for retraining.

Likewise, good performance may indicate untapped potentials that should be

developed. Performance appraisal is a source through which training and

development needs of employees can be identified.

,With these diverse observations, it is obvious that performance appraisal

is a veritable tool in the success of any organisation and that problems arising

from its poor implementation have great impact on the overall corporate

performance.

With respect to linking compensation in the form of promotion and salary

increment to performance appraisal, some writers are of the view that when pay

and performance are closely linked, the pay issue may overshadows all other

purpose of performance appraisal, the appraiser may be encouraged to over rate

employee if they think that adverse financial consequences may otherwise result.

However, other writers has argued that organisations are more likely to develop

performance oriented culture in which high performance are seen to receive

extra reward and vice versa.

Considering the above arguments, this study seeks to examine the extent

to which performance appraisal (assessments) are linked with compensation in

organisations.

In this regard, this study generally set out to examine the effects of

performance appraisal scheme on job performance in organisations.

HISTORY OF ORGANISATIONS UNDER STUDY .$ 8 &'J

The following establishment wer: -considered by the researcher for the

purpose of the study because of t I?+- e important position they occupy in Banking

and Public Sectors of the Nigerian economy. The establishments include: Union

Bank of Nigeria Plc., First Bank of Nigeria Plc., National Electric Power Authority

(NEPA) and NITEL, c! ct

The detaiLh~storical background-*re as follow:

UNION BANK OF NIGERIA PLC

Union ants early stage of history was known as Bardays Bank from

1917 up to the early 1960's. The demand of the society on banking s e r v i c e s ~ g r -

stable, predictable and fairly mechanistic. Therefore, the response of staff

recruitment at that time was to source for staff, of low level skill, but reasonable

high level of ability to appreciate, learn and do the basic jobs of records creation,

record keeping, maintenance and record retrieval on which reliability and

effective delivery of banking service largely depend upon.

After independence and in response to changing demands of society on

banking services, the need to raise the quality of staff was gradually felt by the

bank in general, although, the Bardays which eventually became the Union Bank

was among those slow to respond to the necessity for raising the quality of staff

generally, and to anticipate the changes that are with it today. It relied on the

relationship with Bardays UK which provided all the skilled and high level

manpower to blend with the clerical labour recruited locally. The above situation

began to change only from the mid seventies, when recruitment started

considering local personnel who have planning and organisational background.

Today the bank has many staff training centres in the country located in the

following cities: Yaba, Lagos, Port Harcourt, Jos and Ibadan. The bank uses the

eternal consultants in the training and development of her staff.

Union Bank of Nigeria is one of the successful and progressive banks in

the country usually rank among the big three in the banking sector. The bank has

an area office and some branches located in Enugu.

NATIONAL ELECTRIC POWER AUTHORITY (NEPA)

Akpala (1993 p. 67) stated that before the emergency of the Nigerian

Electric Corporation (now National Electric Power Authority) the industry was

shared by different employers types, private, native administration and

government. The Electricity undertakings operated by the government were run

as a social service with little concern, if any at all for profit or even breaking even.

But when the electricity corporation came into being, if was required to cover its

cost, taking good and bad year together, and to render good quality and quality

service in the public interest.

Recently, the fortunes of the Electricity Corporation have been to change

for the better. In 1960, the chairman of the corporation confidently said that if

conditions remained stable, one of which was the falling trend in the price of fuel,

the National Electric Power Authority should henceforth be able to budget for an

increasing annual surplus, thus enabling the corporation to finance a large

proportion of its development programme from revenue and thus relieving the

Federal Government of some of the burden on their resources.

In the late 1980's the corporation's fortunes were threatened and the

revenue accrued to it, declines drastically. This development led to the

retrenchment and rationalisation of some of her employee in 1991. However the

corporation is gradually picking up following the partial commercialisation the

organisation is undergoing.

STATEMENT OF THE PROBLEM

The purpose of the study is to assess performance appraisal and its

influence on training in organisations so as to determine its impact on employee

job performance.

STATEMENTS OF SUB PROBLEM

SUB-PROBLEM 1 :

The purpose of the study is to examine the extent to which the training

employees received after performance appraisal improved their performance so

as to determine its effectiveness on Job performance.

SUB-PROBLEM 2:

The purpose of the study is to compare job performance of employees

who received feedback report after their performance appraisal and those who

did not so as to determine the effectiveness of feedback report as a necessary

tool for the employees to improve their performance.

SUB-PROBLEM 3:

The purpose of the study is to examine the extent to which performance

appraisal are conducted in order to determine their influence on promotions in

organisations.

SUB-PROBLEM 4:

The purpose of the study is to examine the extent to which performance

appraisals are carried out in order to determine their influence on salary

increment in organisations.

HYPOTHESES

HYPOTHEIS 1:

Adequate training received by employees after performance appraisal

improves job performance of the employees.

HYPOTHESIS 2:

Feedback on job performance of employees after appraisal enhances job

performance of the employees.

HYPOTHESIS 3:

Properly organised and executed performance appraisal leads to sound

promotions in organisations.

HYPOTHESIS 4:

Properly organised and executed performance appraisal results in salary

increment of employees in organisations.

SCOPE At10 LIMITATIONS

Five establishments in two sectors of the Nigerian economy namely the

Banking and Public Sectors have been chosen for this research. This is because

of their necessibility. These organisations are Union Bank of Nigeria Plc.,

Afribank Plc., Diamond Bank Plc., all at Okpara Avenue Enugu representing the

Banking Sector and Nigerian Electric Power Authority (NEPA) and Nigerian

Telecommunications Plc.(NITEL) Enugu representing the public Sector.

The research project has its own limitations inherent in all researches. The

researcher's financial recourses as a student are limited. As a result of this, the

research was limited by finance.

Inaccuracy may have resulted from the sample size used. The study of a

sample cannot give as accurate a result as a population.

Also, a small fraction of the questionnaire given to respondents will be

returned uncompleted and some will not be returned.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 PERFORMANCE APPRAISAL DEFINED

The concept, performance appraisal has been defined in different ways by

several authors, writers and management experts and practitioners. The

terminology used to describe performance appraisal varies from one

writer/author to another. It could be appraisal, performance assessment,

performance review, individual assessment and a number of other items. !&!..& According to Eichel and Henry (1984, p.7) performance appraisal is

defined as a process of measuring and reporting employee behaviour and

accomplishment for the purpose of improving job performance.

Wherther and Davis (1985, p. 282) describe performance appraisal as a

process by which organisations evaluate employee job performance. They

further stressed that it is an essential function that supervisors and employees

perform informally .that superyisors -_ _._...-- - and employees..perform inform ally- on an

ongoing basis. Most people seek feedback on their performance, and those who

manage others must evaluate individual performance in order to know what

action to take. When performance is substandard, the manager or supervisor

must take corrective action which could be in the form of acquiring training skills;

likewise, when performance is good, that behaviour should be reinforced.

Blanchard and Johnson (1982, p. 100).

Wherther and Davis (1985 p. 282) also emphasised that although informal

and ongoing assessment are necessary, they are in insufficient, because they

seldom leave any documentation of either good or poor performance. With formal

systematic feedback, the personnel department can identify specific training or

career development needs. Feedback helps evaluate recruitment, selection and

placment procedures. Even decision about further promotions compensation

and other personnel actions depend on systematic and documented performance

appraisal information.

Blum and Russ (1942, p. 12) describes performance appraisal as the

process of reviewing an individual's performance and progress in a job and

assessing his potentials and future promotions.

Guilleman (1968, p. 32) defines performance appraisal as an act of

determining, assessing the performance of individual staff as established by

management and seeking ways of improving it, identifying his potentials for

development. He emphasised that the senior subordinates will use these

standards of good and bad performance of the employees as critical means of

determining the level of improvement needed on the past performance.

Appleby (1981, p. 62) is of the view that training which could also be

undertaken as a result of performance appraisal recommendation, helps to

improve current performance and provides a suitably trained staff to meet

present and future needs.

Frank (1970, p. 35) opined that evidence of the need for higher job

performance is among the factors that serve as clues of accomplishing training

goals.

Criticism of performance appraisal as an idea and in terms of the

techniques used are not new. One of the most cogent and well argued critiques

came frorq Douglas McGregor in the Harvard Business Review (1958, p. 334). \$

McGregor.of the view that many managers disliked conducting performance 8 \

appraisals because they were unhappy sitting in judgement on their

subordinates. He favours a shift from appraisal because they were unhappy

sitting in judgement on their subordinates. He is also of the view that "Although

.. . still used ... there has never been any hard evidence that (performance

appraisal) actually improves performance

On his question of the relationship between pay and appraisal, Sanderson

(1 994) makes the following argument for not linking pay with appraisal:

When pay and performance are closely linked, the pay issues may

overshadow all other purposes of performance appraisal. There may be a

tendency for employee to with hold negative information about performance,

leading to a less than frank appraisal discussion. Employee may try to influence

appraisers and seek to set lower, more conservative gaols. Bolton (1 997, p. 158)

Sanderson does however; see a number of advantages in linking pay to

appraisal. Most significantly are:

All parties: appraisers, appraisees and reviewers - take performance appraisal

more seriously.

Many individuals feels that for reasons of fairness, there should be a link

between performance appraisal and pay. Organisations are more likely to

develop performance-oriented cultures in which high performance are seen to

receive extra regard and vice versa. Bolton (1 997, p. 158).

Ilgen, Fisher and Taylor (1979, p. 349 - 71) observed that feedback about the

effectiveness of an individual& behaviour in place of work has long been

recognised as essential for learning and for motivation.

Becker (1978, p. 428 - 33) conclude that feedback can facilitate

performance in many ways by channelling employee's energies to effective work

behaviours.

Ubeku (1975, p. 278) stated that when appraisal reviews are made, the

manager and his subordinates discuss the subordinates performance during the

year under review, pointing out areas of the employee's strength and

encouraging and guiding him in areas where the employee is weak,. This

according to Ubeku will enable the subordinate to avoid his mistakes and b

overcome his weakness in the next period.

In a laboratory experiment, Komaki, Barwick and Scott (1978, p. 434 - 45)

highlighted that knowledge of result is indispensable for improved performance.

When his subjects were given feedback on their past performances, in addition to

specific future goals, overall performance was high, but when feedback of result

was withdrawn, performance returned to the original baseline.

Buckley and Caple (1996, p. 13) are of the view that training helps to give

the individuals who has undergone training greater competence and personal

satisfaction from the experience of being able to perform a job well and from

being able to exercise now skill, techniques and procedures.

Bolton (1997, p. 161) in his view stressed that the aim of managing

performance is to help employees improve performance in line with the wider

aims of the organisation. In this respect, he emphasised that the manager must

act as counsellor to the subordinate and using appropriate techniques, either

direct the employee to or jointly work toward the identification of her weaknesses

and how these weakness should be addressed. The aim should be towards

improved job performance. Bolton is also of the opinion that the aim of managing

performance is also to control employee's performance by rewarding what is

assessed as up to standard, while withholding rewards from which is judged

below standard. This he said is done by way of promotions, transfers, demotion

or suspension. He further stressed that it is common under performance

management in organisation to link pay increase to performance. He pointed out

that pay review should be result oriented; the highest rewards should go to those

who achieve (or excel in performance) their targets with those who fail to achieve

(or perform poorly) receiving little or no increase in salary.

2.2 USES OF PERFORMANCE APPRAISAL INFORMATION

According to Eichel and Bender (1984, p.7) the result of appraisal process

are often used for a number of different purpose as highlighted below:

i.

11.

. . . 111.

iv.

2.3

19

To make administrative decisions, such as whom to promote, suspend,

terminate, demote or transfer.

To identify training and development needs, such as what kind of training

and development is needed and who can benefit from it.

To motivate and provide feedback (progress report) by letting workers

know how they are performing, what their strength are, and in what areas

they need improvement.

To make compensation decision such as who should receive merit or

increase.

APPRAISAL METHODS

Beach (1975, p. 96) listed some of the following types of appraisal

methods. Each method has some value but each also carries with it some risks.

1. Rating Scales

2. Employee Comparison

a. Ranking

b. Forced distribution

3. Check List

a. Weighted check list

b. Forced choice

4. Critical Incident

5. Fres - form Essay

6. Grouping Appraisal

RATING SCALES METHOD

This is the oldest and most commonly used type of rating. Most commonly

the rates is supplied with a printed from for each person to be rated, it contains a

numbe; of qualities and characteristics to be rated. For hourly paid works

quantity and quality of work are rated. Also job knowledge, co-operative,

descendability initiative, industriousness and attitude are rated. For the

managerial ability, leadership, initiative, job performance, co-ordination and

emotional stability which are typical factors are rated.

Each subordinate is rated by circling or checking the score that best

describes his or her level of performance for each trait. The assigned values for

each trait are then added up.

A major problem with this method is that there is a high degree of bias on

the part of the rater. This result in a situation where different raters may give

different ratings to the same employee.

Ranking Method: This requires the rater to rank his subordinate on an overall

basis according to this job performance and value to the organisation. In this

process if is best to identify and select the best and poorest first and the rest of

the group should be adequately appraised.

Forced Distribution Method: This has been designed to prevent supervisor from

clustering their men at the high end of the scale or at some other point. The rater

distributes the ratings in a pattern to conform to a normal frequency distribution.

The supervisor must allocate 10 percent of his employees to the top of the scale,

20 percent in the next highest category, 40 percent in the middle bracket, 20

percent in the next category and 10 percent in the bottom grouping.

Weighted Check-List: This form of rating consist of a large number of statement

that describes various types and levels of behaviour job or family of jobs. Every

statement has a weight or scale value attached to it. When rating an employee,

the supervisor checks all the statements that closely describe the behaviour of b

the individual. The rating sheet is then scored by averaging the weights of all

descriptive statements checked by the rater.

Force Choice: It was developed at the end of World War II by a group of

industrial psychologist to determine the performance of officers in the U.S Army.

The rating must be constructed specifically for a general type or group of jobs

that consists of a large number of tetrad, groups of four statements each or in

some cases five statements are used. For each tetrad, the rater must check one

statement that best describes the ratee's performance and the least descriptive

statements. These tetrad are designed in such a way that two statement appear

favourable and too unfavourable. The actual value of the statements are kept

secret from the superior to prevent deliberate bias on their part.

Critical Incident: This was developed recently, it requires every supervisor to

adopt a practice of recording in a notebook those significant incident in an

employee's behaviour that indicate effective or ineffective behaviour on the job.

This method provides a basis for conducting an objective discussion of employee

performance. Ideally, keeping a running list of critical incidents provides some

concrete examples of what specifically subordinate can do to eliminate any

performance deficiencies.

Free-Form Essay: This method simply requires the supervisor to write down his

impressions of the individual on a sheet of paper. If desired, the comment can be

grouped under such heading as nature of job performance, reasons for this

behaviour, employee's characteristics and developmental needs for future.

Considerable time and effort must be developed to this method for effective

results. b

Group Appraisal: Usually carried out in industries, this method emphasis the

training, growth and development of the individual. The appraisal group usually

consist of the supervisor of the employees being judged plus three or four other

supervisors who are well versed in the employee's work performance. This

method like all others is suitable for all rating levels of employees, whether junior

or management staff.

2.4 PROBLEMS OF TECHNIQUES IN APPRAISAL

Beach (175, p. 96) identified these technical problems in appraisal

methods.

Halo Effect: which is the tendency for most raters to let the rating they assign to

one characteristics excessively influence their ratings on all subsequent traits or

characteristics. Many supervisors tend to give the rater approximately the same

rating on all factors. The rating scale is usually subsceptible to this. This can be

minimised by the rater judging all his subordinates on a single factor before going

on to the next.

Leniency or Strictness: Raters have a tendency to often assign consistently high

values to their people. This is very common with rating programs. Also damaging

but less common is the tendency of some supervisors to give low ratings. It can

be partially overcomed by counselling the raters effectively and training them to

enhance good results.

Central Tendency: Some supervisors tend to seek a middle ground in order to

protect themselves from higher management criticism of their ratings by avoiding

extremes. They tend to score nearly all employee average instead of marking

some outstanding or below standard. In the case of unsatisfactory, employee is

inclineb to generosity and gives them higher evaluation them they deserve.

Distinction is not made between high and low performers, making them almost

useless for promotion, salary increment or counselling purposes.

Interpersonal Relations - Bias: How a supervisor feels about each of the

individual working for him whether or not he personally likes or dislikes them has

a tremendous effect upon his rating of the performance. ' q ~ ~ ~ r q - ~ 6°K h l l t y - ! y (

*- ?"'n p . n v Organisational Influences: Nowhere is the subjectivity of performance evdluation

more glaring than when ratings change according to the way they are going to be

used by management. Fundamentally, raters tend to take into consideration the

end use of the evaluation results to influence performance.

In order to eliminate these problems associated with techniques of rating,

raters have to be trained in such a way that the above mentioned problems will

not reflect in the appraising system.

2.5 FEEDBACK AS AN IMPORTANT TOOL FOR EMPLOYEES

DEVELOPMENT OR IMPROVEMNET.

According to Banjoko, (1982 p. 31 - 34) the process of improving

employees v through the feedback system is illustrated in figure 2.1 the model

shows that importance of review interview as consisting of additional clarification

of expectations in terms of performance standards and behaviours; coaching on

the job related problems; and the discussion of individual employee's plan for

self-improvement or development. The performance review interview then leads

to the mutual setting of specific performance objectives and goals which in turn

serves as a springboard for growth and improved performance.

Fig. 2.1 FEEDBACK AND PERFORMANCE IMPROVEMENT MODEL

Source: Journal of the Institute of Personnel Management of Niger.ia. Vol. 9 No.2 Sept. 1982.

Clarification - Performance Interview Evaluation

Coaching I

' 1 I Counselling 1

I I Assisting in the Execution

Goal Improved .I setting 1-1 performance

[+/ of individual self

development I plan I It is important to emphasis that the link between feedback and improves

performance as illustrated above does not imply a direct and positive

relationship. As pointed out by Ilgen, Fisher and Taylor (1979 p. 349) the

relationship is influenced by series of mediating variables which include the

subordinating variables which include the subordinate perception of the source of

feedback information and the specificity of the goals. Improved performance and

employee could be enhanced only with due consideration to these intervening

factors.

According to Banjoko (1982, p. 31) a performance appraisal system in

Nigeria have been characterised with non-disclosure of appraisal results of the

ratee.,This apparent secrecy over performance appraisal results has put in the

hands of supervisors and managers, a potential tool for cracking down a

recalcitrant subordinate with impurity.

In the open reporting systems, appraisals have been argued to be

desirable in order to protect the subordinates against the prejudice of their

superiors that cannot be supported by facts. "Apart from safeguarding

subordinates against irrational and biased evaluation, the feedback of the

performance rating result to the employees through the open appraisal system

has motivational impact". Without a feedback system the formal appraisal

technique might not be able to effectively enhance improvement in individual job

performance.

One group of researchers hold the view that although feedback of

appraisal result might be morally desirable, it could in some circumstances do

more harm than good. Walker and Meyer (1961, p. 291 are of the view that the

skill with which supervisors handle the appraisal feedback discussion with his

subordinate is a key factor in determining whether or not the performance

appraisal program is effective in motivating behavioural changes. Beveridge

(1974 p. 68 - 74) maintained that feedback even when it contains criticism can

be helpful provided it is directed towards performance and not personality.

Beach (1975 p. 367) suggests that the appraisal process is quite properly

viewed as an integral part of the development of people in the organisation. Such

development lead~to improved job performance and the acquiring of new skills

and knowledge by the individual. This qualifies him for boarder responsibility,

more rewarding assignments and promotion.

The goal of the formal appraisal is not to police employee's behaviour but

rather to assists employee in redirecting their effort towards higher performance.

As a result, to be able to stimulate effective job behaviour and lead to positive

impact in a developmental context, it is inevitable that employee be told how well

they aie performing, or how deficient they are and be informed of what

improvement are expected. The erqployees with a promising future need to be

informed of his performance so as to strengthen his feelings of achievement,

recognition and security. The poor performance employees equally need to be

told how ar~d where their performance fall below expectations and be assisted to

improve.

CHAPTE R THREE RESEARCH METHODOLOGY

Two broad methods were employed by the researcher to facilitate the

successful collection of data and they include designed questionnaires and

personal interview.

SCOPE

The research investigation was limited to two broad sectors of the Nigeria

economy namely, the banking sector and the public sector. Under the banking

sector, the research investigation was limited to staff of Afribank Plc., Diamond

Bank Plc. And Union Bank Plc. While under the public sector, the investigation

was limiteci to National Electric Power Authority (NEPA) and NlTEL all in Enugu.

3.1 SOURCES OF DATA

Primary data and secondary data formed the major sources of data

collection in view of the descriptive nature of the study:

1. Primary Data: The research devoted much effort on this source. This can

be seen from the data analysis process which speaks for itself. Two

techniques were utilised in gathering the primary data.

(a) Questionnaire

The questionnaires were multiple in nature. The questions were

simple and related to both the main problem and sub-problems that

the researcher wishes to investigate.

(b) Personal Interview

Oral interview was equally used to verify the data collected from other b

sources.

2, Secondary Data: This is made up of contribution and opinion of different

writers on performance appraisal. The wealth of knowledge and idea

gathered in this field helped the researcher immensely in the construction

of the questionnaire and formulation of the hypotheses used in the study.

The union instrument from where the data were collected includes

management textbooks, journals of Nigerian Institute of Management and

Articles from business magazines.

3.2 SAMPLE SIZE

It was not possible for the researcher to extend the investigation to cover

the entire population of the various selected establishments in the two selected

sectors in Enugu. However, certain percentage of each of the entire population of

the various establishment were sampled of the various establishments were

sampled as shown below:

1. Union Bank Nigeria Plc., 13% of the entire population in Enugu of about

300 which is approximately 40 members of staff were sampled.

2. Diamond Bank Plc., about 30% of the entire population in Enugu branch of

about 65 which is approximately 20 members of staff were sampled.

3. Afribank PI., 20% of the entire population in its Enugu branch of about 100

which is approximately 20 employees were sampled.

4. National Electric Power Authority (NEPA), 18% of the entire population in

Enugu branch of about 280, which is about 50 employee were sampled

5. NITEL, 20% if the entire population of its Enugu branch of about 258

which is approximately 52 employees were sampled i.e.

METHOD AND MODE OF DISTRIBUTION OF QUESTIONNAIRE

The researcher applied random sampling approach. Simple random

sampling is the basic probability sampling design. In a random sample, each

person in the universe has an equal probability of being chosen for the same and

every collection of person of the same size has an equal probability of becoming

the actual sample.

The use of table of random digit is used by the researcher. A table of

random digit is a continuous sequence of numbers not appearing in any

particular order. No number in the sequence appear more than the other. All the I

elements in the population are numbered. The researcher, having predetermined

the size of the sample he wishes to draw enters the table at any point. Beginning

from this point, the researcher decides to move upward, down or side ways. The

element having those numbers drawn from the table now constitute the sample.

Questionnaire were equitably distributed covering various departments

and sections in each of the five establishment based on the sample size

calculated.

Statistical Tools and Formula Used

The expected values (Ei) are derived and calculated as follows:

Ei = Corresponding Row Total x Corresponding Column Total Overall Total

Chi - square calculation = X' = (Oi - ~ i ) ' Ei

Where X' = Test statistic

Oi = Observed values of frequencies

Ei = Expected values of frequencies

a = Level of significance = 0.05

(Oyeka, 1992, p. 363)

CHAPTER FOUR

DATA PRESENTATION

Data presentation follows a pattern. A logical pattern is to arrange data

according to subprograms which subsume hypotheses, or according to research

question each with its pertinent data.

Presentation of data derives from the questionnaires and responses in the

case of surveys. The researcher administers questionnaire which subjects fill out.

The responses from subjects, are recorded, tabulated and classified, and put in

categories.

TABLE 4.1

JOB PERFORMANCE

I Reponses I Respondents Percentages I I I Banking Sector I Public Sector I Banking Sector 1 Public Sector

I

From the above table, for the banking sector, all the respondents are

really interested and therefore would like to know how they fare in their jobs.

Therefore 100% of the respondents would like to know how they perform. For the

public sector, 98% of the respondents would like to know how they are

performing in their jobs only 2% of the respondents do not care to know how they

are perf,orming in their jobs.

I Total I 80 102 100% 100%

TABLE 4.2

Reponses

Total

From the above table 4.2, the banking sector 53 of the respondents will

want to improve performance on their jobs even if their input to output in the

organisation is not strictly assessed. While 47% of the respondents will not want

to improve performance if they are not strictly assessed in their jobs. For the

public sector, 88% of the respondents will want to improve performance on their

jobs even if their input to output is not strictly assessed. While 12% of the

respondents will not want to improve performance if their input to output is not

strictly assessed by the organisations.

EMPLOYEE IMPROVEMENT

TABLE 4.3

IDENTIFYING MANPOWER TRAINING AND DEVELOPMENT NEEDS

I Reponses / Respondents Percentages

Respondents

From the above table 4.3 shows that in the banking sector, 80% of the

respondents feel that performance assessment enable organisations to identify

manpower training and development needs of workers with respect to their jobs.

Banking Sector

4 2

28

80

Percentages

Yes

No

Total

Public Sector

90

12

102

Banking Sector

53%

47%

100%

Public Sector

88%

12%

100%

Banking Sector

8 0

0

80

Public Sector

92

10

102

Banking Sector

80%

20%

100%

Public Sector

9O0/0

10%

100%

While only 20% of the respondents do not think so. From the public sector 90%

of the respondents agrees with the above statement, while only 10% of the

respondents disagree with the statement.

From the above, table 4.4 shows that for the banking sector, 77% of the

respondents have been sent on training as a result of needs identified after their

performance assessment while 23% of the respondents has not been sent on

any training as a result of need identified after their performance assessment.

For the public sector, in the same table, 76% of the respondents have

been sent on training due to needs identified after their performance assessment

while 24% of the respondents said they have not been sent on any training as a

result of needs identified after their performance assessment in the

organisations.

TABLE 4.4

RECEIVED TRAINING

Percentages -

Banking

77% 76%

2 3 '10 24%

100% 100% --

Reponses

Yes

NO

Total

- Respondents

Banking Sector

62

18

8 0

Public Sector

78

24

102 -

TABLE 4.5

TRAINING PROGRAMMES RECIEVED

Reponses

Very Useful

Satisfactory

Useless

Total

Respondents Percentages I Banking Sector

64%

36%

From the above table, 64% of the respondents in the banking sector rated

the training programmes attended as very useful, while 36% of the respondents

said the training programmes they attended were satisfactory. No respondents

saw it as useless. For the public sector, 73% of the respondents rated the

training programmes they have attended as very useful, 27% rated it as

satisfactory while no respondents saw it as useless.

TABLE 4.6

IMPROVEMENT DUE TO TRAINING

~ r o m the above, table 4.6 shows

Reponses

Yes

No

Total

Percentages

80% 85%

2 0 O/o I 5%

10O0/o 10O0/o

that for the banking sector, 80% of the

Respondents

respondents agrees that the training they received has enabled then improve

Banking Sector

64

16

8 0

their skills and efficiency in their job performance while 20% of the respondents

feels that the training has not enabled them to improve their skills and efficiency.

Public Sector

87

15

102

For the public sector, 85% of the respondents agrees that the training they

received has enabled them improve their skill and efficiency. While 15% of the

respondents feels that the training has not enabled them to improve their skills

and efficiency in their job performance.

TABLE 4.7

Reponses

Yes

No

Total

From the above, table 4.7 clearly shows that for the banking sector, 74%

MASTERED YOUR JOB DUE TO TRAINING

of the respondents ag&&.that __-.. the training they received has given them a

mastery and satisfaction over the performan e of their jobs thus highly improving e ,/ 3 k - b

their performance, while 26% disagreesiwfhe statements. For the public sector,

89% of the respondents agrees to the statement while 11% of the respondents

Respondents

disagree to the statement.

Banking Sector

59

2 1

80

Percentages

TABLE 4.8

Public Sector

9 1

1 I

102

Banking Sector

74%

26%

100%

Public Sector

89%

11%

100%

WITHOUT ADEQUATE TRAINING

Percentages

Banking Sector

67% 85%

33% 1 5%

100% 100%

Reponses

Yes

No

Total

Respondents

Banking Sector

54

26

80

Public Sector

87

15

102

From the above, 67% of the respondents in the banking sector feels that

adequate training which they received after assessment made it possible for

them to improve on their job performance while 33% of them do not agree with

this statement. For the public sector, 85% of the respondents feel that adequate

training which they received after assessment made it possible for them to

improve on their job performance while 15% of the respondents in the public

sector do not agree to this statement.

TABLE 4.9

FORMAL DOCUMENTED REPORT

I Reponses I Respondents I Percentages

Yes

No

I Banking Sector

From the above, 80% of the respondents in the banking sector says there

Public Sector Public Sector

Total

is a formal documented progress report system used in their organisation while

20% said there is none. In the public sector, 89% of the respondents said there is

7----- ---- I 80 1 102 1 100% 1 100% 1

a formal documented progress report system used in their organisation while

11 O h said there is none.

TABLE 4.1 0

HAVE YOU RECEIVED PROGRESS REPORT

Respondents Percentages

Banking Sector Public Sector Banking Sector Public Sector

Total 102 100% 100%

From the above table, 74% of the respondents in the banking sector they

have received progress report on their performance after an assessment while

26% said they have not while in the public sector 620h of the respondents say

they have received progress report after an assessment while 38% of the

respondents said they have not received progress report after an assessment.

TABLE 4.1 1

FREQUENCY OF FORMAL DOCUMENTED PROGRESS REPORT

Reponses Respondents

After every performance Assessment

When a major error is observed while carrying out your duties

When an outstanding performance is observed while carrying out your duties

Total

Banking Sector

4 0

9

3 1

8 0 --

-- .. . .- - Public Sector

6 1

3 2

9

102

Percentages . . - - - - .-

Banking Sector

50%

1'1%

39%

100%

Public Sector

60%

3 1 %

9%

looO/o

From the above, table 4.1 1 shows that in the banking sector, 50% of the

respondents received formal documented progress report after every

assessment, 1I0/o received it when a major error is observed while carrying or.

performing one's duties, 39% received it when an outstanding performance is

observed while performing one's duties. In the public sector, 60% of the

respondents received formal document progress report after every assessment.

31% received their own when a major error is observed in the course of

performing their duties and 9% received it when an outstanding performance is

observed while carrying out their duties.

From the above, in the banking sector, 60% of the respondents said there

TABLE 4.12

INTERPERSONAL PROGRESS REPORT (FEEDBACK)

has been an adequate use of the interpersonal progress report system in their

relationship with their boss. While 40% of them said there have been none. In the

Percentages

Banking

60%

40%

100% 100%

Reponses ] Respondents

public sector, 78% of the respondents said there has been an adequate use of

Yes

No

Total

interpersonal progress report system in their relationship with the boss, while

22% of thew said there have been none.

Banking Sector

4 8

32

80

TABLE 4.1 3

Public Sector

80

22

102

From the table above, in the banking sector 73% of the respondents

agreed that interpersonal progress report between them and their boss have

been useful in motivating them to improve performance on their while 27% of the

respondents does not believe so.

INTERPERSONAL PROGRESS REPORT

Reponses

Yes

No

Total

--

Respondents Percentages

Banking Sector

5 8

22

80

27%

102 100% 100%

In the public sector, 90% of the respondents agreed that interpersonal

progress report between them and their boss have been useful in motivating

them to improve their performance while 10% of the respondents feel it has not

been useful in motivating them to improve on their job performance.

TABLE 4.14

USE OF PROGRESS REPORT

1 I Banking Sector / I Reponses

Encouraging

Discouraging

Made no Diff.

Total

Respondents

Public Sector

87

Percentages

Banking Sector Public Sector r---

From the above, 85% of the respondents in the banking sector, feel that

the use of progress has been encouraging while 15% feels that the use has

made no difference to them.

In the public sector, 85% of the respondents feels the use of progress

report has been encouraging while 15% of them feels that it has made no

difference to them.

TABLE 4.15

PROMOTION BASED ON RECOMMNEDATION x-Tpond;n Reponses - -- -- - - - - - - ts --

b

-- -- --

- - - - Percentages - -- -- pp

Bankmg Sector

67%

33%

100%

Publtc Sector

8 6

16

102

Banking Sector Public Sector

84%

16%

100%

No

Total

26

8 0

From the table above, in the public sector, 84% of the respondents agreed

that their promotions has been based on recommendation made by their boss

after their performance assessment while 16% of the respondents feels that their

promotion has not been based on any such recommendation.

In the banking sector, 67% of the respondents agreed that their promotion

has been based on recommendation made by their boss after their assessment.

While 33% of the respondents disagree that their promotions has been based on

recommendation based on their assessment.

TABLE 4.16

MOTIVATION TO IMPROVE

1 Banking Sector I Public Sector Banking Sector / ~;i;iic ~ e c t o ~ l

I Reponses ( Respondents

I Yes I 59 1 59 / 74% 1 58% 1

Percentages

From the table above, in the banking sector, 74% of the respondents

agreed that their promotion based on their assessment recommendation has

motivated them to improve on their performance on the job while 26% of the

respondents do not believe so.

In the public sector 58% of the respondents agreed that their promotion is

based on assessment recommendation has motivated them to improve their

performance while 42% of them disagreed.

No

Total

2 1

80

4 3

102

26%

100%

42%

100%

TABLE 4.17

From the above, in the banking sector 68% of the respondents said that

their salary increment has been based on the recommendation made by their

boss based on their performance assessment, while 26% of them said no, that it

has not been so.

In the public sector, 84% of the respondents said that their salary

increment has been based on the recommendation on their performance

assessment whereas 16% of the respondents said this has not been so.

SALARY INCREMENT

TABLE 4.18

MOTIVATION DUE TO SALARY INCREMENT

Reponses

Yes

No

Total

From the table above, in the banking sector, 60% of the respondents said

that their salary increment based on performance assessment recommendation

Respondents

I Reponses Respondents

has adequately motivated them to improve their performance while 40% of the

Banking Sector

54

26

80

Percentages

Yes

No

Total

-- Percentages

respondents does not hold the same view.

Public Sector

86

16

102

Banking Sector

68%

32%

100%

Banking Sector

60%

40%

100%

Public Sector

84%

16%

100% -

Banking Sector

4 8

32

8 0

--- Public Sector

84%

16%

100%

Public Sector

86

16

102

From the above table, in the public sector, 81% of the respondents agreed

TABLE 4.19

IN YOUR OWN VIEW

that their organisation's periodic performance assessment has been properly

carried out while 19% disagreed

Reponses

Yes

No

Total

In the banking sector, 80% of the respondents agreed while 20%

Percentages

disagreed.

Respondents

Banking Sector

80%

2 0 O/o

100%

Banking Sector

64

16

80

Public Sector

81 %

1 9%

100%

Public Sector

83

19

102

CHAPTER FIVE TESTING OF HYPOTHESIS

This chapter deals with the actual testing of the hypothesis. Each

hypothesis will be tested to accept or reject the stated hypothesis using chi-

square technique. Each of the four hypotheses has a null hypothesis (Ho) and an

alternative hypothesis (HI) with which to compare the results obtained.

CHI-SQUARE RULE: If the chi-square calculated is less than the chi-square

value shown in the statistical table, the null hypothesis is accepted but if the chi-

square calculated is greater than the chi-square value shown in the statistical

table; the null hypothesis is rejected and the alternative hypothesis is accepted.

Hypothesis I :

Ho: Adequate training which employees received after performance appraisal

does not result in improvement in job performance of the employees.

H,: Adequate training which employees received after performance appraisal

results in improvement in job performance of the employee.

A TABLE OF OBSERVED FREQUENCY - - - -

/ Responses ( Banking Sector I Public ~ e c G T ~ o t a l I

Total 80 102 182 .- --- - .

The expected frequencies are derived thus:

TABLE 5.1

2 X 2 CONTIGENCY TABLE OF OBSERVED AND EXPECTED VALUES

Responses

Yes

(Oi - ~ i ) ~ Calculated x2 = C E i

Total

Total

150

Banking Sector

59 (65.93)

80

Public Sector

91 (84.07)

102 182 i

X' = C (Oi - ~ i ) ~ / Ei

= 7.3912

Calculated x2 = 7.391 2

The Degree of freedom = (r - 1) (c - 1) = (2 -1) (2 - 1) = 1

The Level of significance = 0.05

The critical x2 value = 3.841

The calculated x2 of 7.3912 is greater than the critical x2 value of 3.841.

Hence we reject the null hypothesis (Ho) which states that adequate training

which employee received after performance appraisal does not result in

improvement in job performance of the employee while the alternative hypothesis

(HI) which states that adequate training which employee received after

performance appraisal resultjin improvement in job performance of the employee

is accepted.

Hypothesis 2:

Ho: Feedback on job performance of employee after appraisal does not lead to

enhanced employee job performance.

H,: Feedback on job performance of employee after appraisal leads to enhanced

employee job performance.

The expected frequencies are derived thus:

fo fi Ei = - f

150 x 80 182 = 65.93

32 x 80 182 = 14.07

150 x 102 182 = 84.07

32 x 102 182 = 17.93

A TABLE OF OBSERVED FREQUENCY

TABLE 5.2

2 X 2 CONTIGENCY TABLE OF OBSERVED AND EXPECTED VALUES

Responses

Yes

No

Total

Calculated x2 = C (Oi - ~ i ) ~ Ei

Banking Sector

5 8

22

80

-. - - - - - - Total

150

32

182

Responses

Yes

No

Tota I

Public Sector

92

10

102

ORGANISA TION - -- -.---

Banking Sector

58 (65.93) 92 (84.07)-

22 (14.07) 10 (17.93)

80

Total

150

32

182 1-

x2 = C (Oi - ~ i ) ~ 1 Ei

= 9.6784

Calculated x2 = 9.6784

The Degree of freedom = (r - I ) (c - 1) = (2 -1) (2 - 1) = 1

The Level of significance = 0.05

The critical x2 value = 3.841

The calculated x2 of 9.6784 is greater than the critical s2 obtained from the

(Oi - 62.8849

62.8849 4.4699

62.8849 0.7480

62.8849 3.6784

Oi

58

22

32

I 0

table. Hence we reject the null hypothesis (Ho) which states that feedback on job

performance of employee after appraisal does not lead to enhances employee

job performance while the alternative hypothesis which states that feedback on

job performance of employee after appraisal leads to enhanced employee job

performance is accepted.

Hypothesis 3:

E i

65.93

14.07

84.07

17.93

Ho: Properly organised and executed performance appraisals does not lead to

sound promotions in organisations.

Oi - Ei

- 7.93

7.93

7.93

- 7.93

HI: Properly organised and executed performance appraisals leads to sound

promotion in organisations. b

A TABLE OF OBSERVED FREQUENCY

I Responses / Banking Sector I Public Sector I Total /

1 Total I 80 / 102 1 1 8 2 1

Yes

The expected frequencies are derived thus:

5 4 - 7 86 - 1 1 4 0 1

TABLE 5.3

2 X 2 CONTIGENCY TABLE OF OBSERVED AND EXPECTED VALUES

Calculated x2 = C (Oi - ~ i ) ~ Ei

Responses

Yes

No

Total

- Total

140

42

182

Banking Sector

54 (6 1.54)

26 (1 8.46)

80

~ u G i c Sector

86 (78.46)

16 (23.54)

102

x2 = C (Oi

0 i

54

Calculated x2 = 7.143

The Degree of freedom = (2 -1) (2 - 1) = 1

The Level of significance = 0.05

The critical x2 value = 3.841

The calculated x2 of 7.143 is greater than the critical x2 value of 3.841.

E i

61.54

Hence we reject the null hypothesis (Ho) which states that properly organised

and executed performance appraisalgdo not lead to sound promotions in

organisation. The alternative hypothesis (HI) which states that properly

organised and executed performance appraisals lead to sound promotions in

organisation is accepted.

Hypothesis 4:

Ho: Properly organised and executed appraisals does not result in salary

increment of employees in organisations.

HI: Properly organised and executed performance appraisals results in salary

increment of employees in organisations.

Oi - Ei

- 7.54

(Oi - ~ i ) '

56.85

(Oi - ~ i ) ' I Ei

0.9238

A TABLE OF OBSERVED FREQUENCY

I Responses I Banking Sector I Public Sector I Total /

The expected frequencies are derived thus:

Total

TABLE 5.4

80

Calculated x2 = C (Oi - ~ i ) ~ E i

2 X 2 CONTIGENCY TABLE OF OBSERVED AND EXPECTED VALUES

102

Responses

Yes

Ns,

Total

182

Total

140

42

182

ORGANISA TlON

Ban king Sector

54 (6 1.54)

26 (1 8.46)

80

Public Sector

86 (78.46)

16 (23.54)

102

(Oi - ~ i ) ' 1 (Oi - ~ i ) ' I Ei

x2 = C (Oi - ~ i ) ' / Ei

Calculated x2 = 7.143

The Degree of freedom = (2 -1) (2 - 1) = 1

The Level of significance = 0.05

The critical x2 value = 3.841

The calculated x2 of 7.143 is greater than the critical x2 value of 3.841.

Hence we reject the null hypothesis (Ho) which states that properly organised

and executed performance appraisal do not lead to salary increment of

employees in organisation, while alternative hypothesis which states that

properly organised and executed performance appraisals result in salary

increment of employees in organisations is accepted.

'CHAPTER SIX

INTERPRETATION, MEANING AND DISCOVERIES

This chapter deals with the interpretations of the results, meanings and

discoveries obtained from the research.

HYPOTHESIS I: The hypothesis test stated that adequate training which

employees received after performance appraisals does not result in improvement

in job performance of the employees. The result of the hypothesis testing showed

that the calculated x2 of 7.3912 is greater than the critical x2 of 3.841. Hence the

alternative hypothesis which states that adequate training which employees

received after performance appraisals results in improvement in job performance

of the employees is accepted, while the null hypothesis which states that

adequate training which employees received after performance appraisal does

not result in improvement in job performance in J&--per+cpme of the ./ employees is rejected.

This study set out to examine the extent to which training which

employees received after their performance appraisal improved their

performance so as to determine their effectiveness on job performance. From the

above interpretation of the results, it means that adequate training which

employees received after performance appraisal improves their job performance.

From the above interpretation and meaning, it was discovered that

employees in organisations who under went training after their performance

appraisal due to identified need to do so, .usually' e~~er iencd improved

performance. Therefore, organisations will in the long run observe improved

employee performance when they send their employees on training

courses/programmes due to identified need to do so after their performance b

appraisals.

- .

HYPOTHESIS II: the hypothesis tested stated that feedback on job performance

of employees after appraisal does not lead to enhanced employee job

performance. The result of the hypothesis testing showed that the calculated x2

of 9.6784 is greater than the critical x2 of 3.841. Hence the alternative hypothesis

which states that feedback on job performance of employees after appraisals

leads to enhance of employees job performance is accepted, while the null

hypothesis which states that feedback on job performance of employees after

appraisals does not lead to enhanced employee job performance is rejected.

The study sets out to examine the effectiveness of feedback reports as a

necessary tool for employees to improve their performance by comparing the job

performance of those who received and those who did not receive feedback

reports after their appraisals. From the above interpretation of the result, it means

that feedback on the job performance of the employees after appraisal leads to

enhance employee's job performance. Therefore feedback is an effective tool for

employees to improve their performance.

From the above interpretation and meaning, it was discovered that when

feedback reports are effectively used after performance appraisals in

organisations, they enhance employee's job performance.

HYPOTHESIS Ill: The hypothesis tested states that properly organised and

executed performance appraisals do not lead to sound promotions in

organisations. The result of the hypothesis testing showed that the calculated x2

of 7.143 is greater than the critical x2 of 3.841. Hence the alternative hypothesis

which states that properly organised and executed performance appraisals lead

to sound promotion in organisation is accepted, while the null hypothesis which

states that properly organised 'and executed performance appraisals do not lead

to sound promotion in organisation is rejected.

The study sets to examine the extent to which performance appraisals are

carried out so as to determine their influence on promotions in organisation.

From the interpretation above, it means that properly organised executed

performance appraisal influence promotions in organisations.

From the above interpretation and meaning, it was discovered that when

performance appraisal are properly organised and executed in organisations,

they can be used to influence promotions.

HYPOTHESIS IV: The hypothesis tested stated that properly organised and

executed performance appraisal does not result in salary increment of

employees in organisation. The result of the hypothesis testing showed that the

calculated x2 of 7.143 is greater than the critical x2 of 3.841. Hence the

alternative hypothesis which states that properly organised and executed

performance appraisal result is salary increment of employees in organisation is

accepted; while the null hypothesis which states that properly organised and

executed performance appraisal does not result in salary increment of

employees in organisation is rejected.

The study sets out to examine the extent to which performance appraisals

are carried out so as to determine their influence on salary increment in

organisation. Form the above interpretation, it means that properly organised and

executed performance appraisal results in salary increment in organisation.

From the above interpretation and meaning, it was discovered that when

performance appraisals are properly organised and executed in organisation they

result in salary increment. Therefore performance appraisals when properly b

carried out influence salary increment in organisation.

CHAPTER SEVEN DISCUSSION OF FINDINGS AND CONCLUSION

The research found that adequate training which employees received after

performance appraisal, resulted in the improvement in job performance of the

employee.

The result and decision based on the study indicates that adequate

training which employees received after performance appraisal results in the

improvement in job performance of the employees. Direct observation of the

various banks and establishment in both banking and public sectors revealed

that employees tend to perform better on their job after undergoing training,

particularly when the training has to do with the rectifying job deficiencies

identified in the course of an assessment of performance on the job.

The finding is in line with the views of bucking and Caple (1996, p.13)

noted in the literature review. These authors stressed that training helps to give

individuals who have undergone training grater competence and personal

satisfaction from the experience of being able to perform a job well from skill,

technique and procedures.

Anorher finding recorded shoed that feedback on job performance of

employees after appraisal leads to enhanced employee job performance. The

result and the decision reached based on the result of the study indicate that

supervisor - subordinate discussion and counselling after an appraisal helps the

employees to improve on the performance on the job.

The finding is in line with the views of Bolton (197, p. 161) noted in his

study. he author emphasised performance counselling in performance

management. He stressed that managers must act as counsellors (after an

assessment) to their subordinates and, using appropriate techniques, either

direct thk employee to or jointly work towards the identification of the employee's

weakness and how this weakness should be addressed. The aim he further

stressed, should be towards improved job performance.

This research found that properly organised and executed performance

appraisals influence promotions of employees in organisations. The result and

decision reached based on the result of the study indicate that to a large extent

promotions in organisation are influenced by appraisal recommendations.

This findings is in line with the view of Bolton (1997, p. 160) noted earlier

in this study. He stressed that the aim of managing performance si among other

things, to control employee's v by rewarding what is assessed as up to standard.

This he pointed out is done by way of promotion.

Further finding established in this study showed that salary increment of

the employees in organisations is influenced by properly organised and executed

performance appraisals. The above finding is in line with the view of Bolton

(1997, p. 161) noted earlier. He opined that it is common under performance

management schemes to link pay increase to performance. He further pointed

out that pay review should be result oriented, the highest reward should go to

those who achieve (or excel in performance) their target; with those who fail to

achieve (or perform poorly) receiving little or no increase in salary.

CONCLUSION'AND RECOMMENDATION The study in its findings and discussions came to the conclusion that

adequate training which employees received based on performance appraisal

recommendation to undergo training due to identified need to do so, results in

improvement in employee job performance. Secondly, feedback, particularly on

interpersonal (supervisor-subordinate) bases has been found to be useful and

highly effective in motivating employees to improve on their performance on the

job-lastly, it can also be said that promotions and salary increment of the

employee in organisation are greatly influenced by properly organised and

executed v appraisals.

Another area for further research is that of effective and proper

implementation of performance appraisal schemes, due to time and financial

constraint, the research could not go any further. J ' ' " " " ' ' " 'w''-L'''

Another area one could look at is that adequate" hnofiiation of the

employees results also in improved job performance but due to financial and time

constraints, were not dealt with. One can still go into such area.

BIBLIOGRAPHY AKPALA, A. (1990) Management: An Industrial nd the Nigerian Perspective,

Enugu; Department of Management, p. 18. R

APPLEBY, R. (1981) Modern Business Administration, London, Pitman Inc.,

p.62.

BANJOKO, S. A. (1982) Performance Appraisal and its Implication for

Employee's Development. Journal of Institute of Personal Management of

Nigeria, Vol. 9 No. 2 July - Sept. p. 31-34.

BEACH, D.S. (1975) Personnel: The Management of People at Work. New York,

Macmillan Press, p. 96.

BECKER, J. (1978) Joint Effects of Feedback and Goal Setting on Performance.

Journal of Applied Psychology, Vol. 63, p. 428-433.

BLUM, A and RUSS, T. (1942) Business Management, California, Good Year

Publishing Co., p. 12.

BUCKLEY, R. and CAPLE, J. (1996) One-to-one Training and Coaching Skills.

London, Kogan Page Ltd., p.9.

BOLTON., T. (1997) Human Research Management: An Introduction, Cambridge,

Blackwell Pub. Inc, p. 156.

EICHEL, E. and BENDER, H: E. (1984) Performance: A Case Study of Current

Techniques. New York, American Management Association, p.7.

EJIOFOR, P. N. (1981) Management in Nigerian Theories and Issues. Onitsha,

Africana Inc., p.98.

FLIPPO, E. 8. (1976) Principles of Personnel Management. Kogakusha, McGraw

Hill, p. 209.

FRANK, R. D. (1970) Development and Training American Management

Association - Management Handbook, New York, A.M.A Inc., p. 35-40.

FREDERICK, W. T. (1972) Personnel Management. New York Vol. 11 p. 14.

GILLEMAN, J. W. (1968) Motivating Men to Work. Fortune Magazine Vol. 11 1

March 1 p. 32.

i HENEMAN, ET AL (1981) Management Personnel and Human Resources -

Strategies and Programs. Illinois, Dow Jones - Irwin p. 78. , 8

!

HALFORD, J. M. (1965) Management and its People. The Evolution of a

Relationship. New York, American Management Association, Inc., p. 273.

ILGEN, ET AL (1979) Consequences of Individuals Feedback on Behaviour in

Organisation Journal of Applied Psychology, Vol. 64 p. 349-371.

KOMAKI, ET AL (1978) A -Behavioural Approach to Occupational Safety

Performance in a Food Manufacturing Plant. Journal of Applied Psychology

Vol. 64, p.435.

MCGREGOR, D. (1960) The Human Side of Enterprise. New York, McGraw - Hill p.35.

RUE, L. W and BYARS, L. L. (1979) personal Management Concept and

Applications, Canada, W. B. Saunders Co. p. 361.

OYEKA, C. A. (1992) An Introduction to Applied Statistical Methods in the

Science, Enugu, Nobern Avocation, p. 361.

ROWLAND, V. K. (1970) Evaluating and Improving Managerial performance.

New York, McGraw - Hill p.8.

UBEKU, A. K. (1975) Personnel Management in Nigeria. Benin City - Ethiope

Co., p. 278.

WERTHER, W. B. and DAVIS, K. (1985) Personnel Management and Human

Resources U.S.A., McGraw - Hill p. 282.

QUESTIONNAIRE

School of Post Graduate Studies,

Department of Management,

Faculty of Business Administration,

University of Nigeria,

Enugu Campus.

Dear Respondent,

I am a Post Graduate Student of the Department of Management, Faculty

of Business Administration, in the above institution. I am carrying out a research

work titled "The Impact of Performance Appraisal on Employee Job Performance

in some Organisations".

Kindly complete the questionnaire to the best of your ability. This research

work is purely for academic purpose. You are assured that any information

supplied must be treated with utmost confidence.

Thanks.

Yours faithfully,

OHUEGBE, V. U.

-

INSTRUCTIONS

Please tick ( ) on the appropriate answers or fill in the corre answers.

Would you like to know how you are performing in your job?

Will you want to improve performance in your job if your input to output in

the organisation is not strictly assessed?

- Do you think that performance appraisal (i.e. assessment) enable

organisations to identify manpower training and development need of

each worker with respect to their jobs?

Have you ever been sent on training programmeslcourses (i.e.

conferences, seminars, workshops, job rotation etc.) as a result of needs

identified after your performance appraisal?

(a) Yes

(b) No I] If the answer to quest 4 above is Yes, how would you rate the training

programmeslcourses you have attended?

(a) Very Useful T I - (b) Satisfactory I I (c) - . use~ess I]

6. Has the training you received enabled you to improve your skill and

efficiency in the performance of your job?

7. Hass the training you received given you a mastry and satisfaction over

the performance of your job thus highly improving your performance?

(c) If No, why?

8. Would you say that without adequate training which you received after

your performance assessment, it would have been impossible for you to

improve on your performance?

(b) No

9. Is there a formal documented progress report (feedback) system used

after an assessment in your organisation?

10. If Yes in question No. 9 above, have you ever received progress report on

your performance after an assessment of your performance?

(c) If No, why?

How often is the formal documented progress report used in your

organisation?

(a) Very Often I 1 (b) Rarely l.l (c) Not at all I I Do you think there has been an adequate use of int erpersonal (person to

person i.e, supervisor to subordinate) progress report (feedback) system

in your relationship with your boss?

(c) If No, why?

Has interpersonal (supervisor to subordinate) progress report between

you and your boss been useful in motivating you to improve on your

performance on the job?

(c) If No, why?

Do you think that the use of progress report has been?

(a) Encouraging u - (b) Discouraging u (c) Made no difference I I Has your promotions been based on the recommendation made by your

boss after your performance assessment?

16. If Yes in question No. 15 above, would you say it has motivated you to

improve performance on your job

(c) If No, why?

17. Has your salary increment been based on the recommendation made by

your boss after an assessment of your performance on the job?

(a> yes TI

18. If Yes in question No. 17 above, would you say it has adequately

motivated you to improve your performance on the job?

(a) : Yes

19. In your own view, do you think you organisation's periodic performance

assessment of its staff has been properly carried out?

Briefly give reason for your answer.