DUE PROCESS IN PERFORMANCE APPRAISAL : A QUASI-EXPERIMENT IN PROCEDURAL JUSTICE ( A CASE STUDY OF INTERCONTINENTAL BANK PLC., ABA.)

ABSTRACT

In every organization, there is always a type of appraisal whether formal or informal that is being used by the managers. Though the staff that make up an organization are made up of people from different  levels of education, with diverse functions or roles.It is expected that the employees are appraised in one way or the other by their boss.

When properly conducted, performance appraisals not only let employees know how well they are performing but also influence their future level of effort and task direction.

The due process metaphor when applied to performance appraisal ensures that the employee is given fair treatment even when charged with legal violations.Employees are permitted to challenge their assessment and provide their own commentary by conducting and presenting a self-appraisal.

This study therefore seek to undertake an assessment of the relationship between the appraisal system and the due process metaphor as amanagement strategy and organizational effectiveness in a typical Nigerian environment. It also relates the due-process appraisal system to procedural justice theory.

TABLE OF CONTENTS

CONTENTS                                                                                               PAGES

Title page                                                                                                         i

Certification                                                                                                  i i

Dedication                                                                                                     i i i

Acknowledgement                                                                                                    i v

Abstract                                                                                                           v  

Table of Contents                                                                                       vi – viii

List of tables                                                                                               ix – x

CHAPTER ONE: INTRODUCTION

1. BACKGROUND OF THE STUDY                                          1 – 5
2. STATEMENT OF PROBLEMS                                                         5 – 6
3. OBJECTIVES OF THE STUDY                                                        6 – 7
4. RESEARCH QUESTIONS                                                                    7
5. FORMULATION OF HYPOTHESIS                                                    8
6. SIGNIFICANCE OF THE STUDY                                              9    
7. SCOPE OF THE STUDY                                                                      9
8. LIMITATIONS OF THE STUDY                                                       10  
9. DEFINITIONS OF TERMS                                                              10 – 11

1.10BRIEF PROFILE OF INTERCONTINENTAL BANK PLC.    11 – 12

REFERENCES                                                                                 13 – 14

CHAPTER TWO: REVIEW OF RELATED LITERATURE

•        INTRODUCTION                                                                       15 – 18
• WHAT IS PERFORMANCE APPRAISAL?                                     18 – 19
•  WHY HAVE AN APPRAISAL SYSTEM?                                       20 – 21
• APPRAISAL PROCESS AND METHODS                                      21 – 31
•  APPLICATION OF THE DUE PROCESS METAPHOR TO     PERFORMANCE APPRAISAL                                                     31 – 33
•  RELATIONSHIP OF DUE PROCESS APPRAISAL SYSTEM TO     PROCEDURAL JUUSTICE THEORIES                                                33 – 37
• EMPLOYEES’ REACTIONS TO DUE PROCESS APPRAISAL SYSTEM                                                                     37 – 41

•  MANAGERS’ REACTIONS TO DUE PROCESS APPRAISAL

 SYSTEM                                                                                       42 – 45

•  MANAGERS’ REACTIONS TO INCREASED PROCEDURAL

 JUSTICE                                                                                        45 – 48

•  GUIDELINES FOR CONDUCTING A SUCCESSFUL                     

 APPRAISAL INTERVIEW                                                                     49 -50               –

REFERENCES                                                                                    51 – 53

CHAPTER THREE: RESEARCH METHODOLOGY

•   INTRODUCTION                                                                                   54
• RESEARCH DESIGN                                                                   54
• SOURCES OF DATA                                                                    55                 

POPULATION OF STUDY                                                                  56

•  SAMPLE SIZE                                                                           56
• ADMINISTRATION OF QUESTIONNAIRE                                      56
• METHOD OF DATA  ANALYSIS                                         56 – 57

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

•  INTRODUCTION                                                                               58
• PRESENTATION, INTERPRETATION AND DISCUSSION

OF   RESULTS                                                                                      58- 69

•  TEST OF HYPOTHESIS                                                                  69 – 79

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS

• INTRODUCTION                                                                                      80
• SUMMARY OF FINDINGS                                                   80 – 85
• RECOMMENDATIONS                                                                   85 – 86
• CONCLUSION                                                                           86 

REFERENCES                                                                                  87 – 89

APPENDIX  1                                                                                      90

QUESTIONNAIRE                                                                            91-93

LIST OF TABLES

1.       Table 4.1.1 Shows the age distribution of the respondents.

2.       Table 4.1.2 Shows the department distribution of respondents.

3.       Table 4.1.3 Shows the length of service distribution of respondents.

4.       Table 4.1.4 Shows the staff hierarchical level distribution of   respondents.          

5.       Table 4.1.5 Shows the response as to employees’ involvement and the target   expected communicated to the employee at the beginning of duty.

6.       Table 4.1.6 Shows the response as to whether the due process appraisal system  would be likely to improve job satisfaction, efficiency,effectiveness, communication, and morale.

7.       Table 4.1.7 Shows the response as to whether the self-appraisal portion in both the new and the current appraisal systems are being put into any    use after the appraisal process.

8.       Table 4.1.8 Shows the response as to whether the new appraisal process is     perceived to be fairer than the current appraisal process by the ‘ employees.

9.       Table 4.1.9 Shows the response as to whether the due process performance appraisal motivates the employee to increase his input thereby  improving his performance.                                                     

10.     Table 4.1.10         Shows the response as to whether the due process appraisal system  improves the employees’ work values.

11.     Table 4.1.11  Shows the response as to managers being more favourably  evaluated and greater satisfaction with the employing organization reported by employees under the due process.

12.     Table 4.1.12         Shows the response as to  the purpose or the use of the appraisal   system in the organization.

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Of all the activities in Human Resources Management (HRM), performance appraisal is arguably the most contentious and least popular among those who are involved though it can provide valuable performance information to a number of critical human resource activities such as the allocation of rewards. Managers do not seem to like doing it, employees see no point in it, and personnel and human resource managers, as guardians of an organization’s appraisal policy and procedures have to stand by and watch their work fall into disrepute. (Bratton J. $ Gold J., 1999).

Employee performance appraisal is carried out within a practical context, which is essentially the day-to-day business of the enterprise. Performance appraisal is commonly perceived to be a key feature of management control and direction wherein the review of employee work performance results in the identification of areas of performance which deserve praise and/or which may need improvement. Without reference to any particular organizational context, appraisal of human performance at work confronts the appraiser with four realities.

First, this activity is inevitable in all organizations-large and small, public and private, local and multinational. This is so for three reasons: (1)Individuals are hired by organizations to perform work needed for the success of the organization; performance appraisal is thus the organization’s way of assessing whether it is getting its rightful due from the individual: (2) individuals differ concerning how well and how conscientiously they do their work: therefore, appraisal is necessary to account for the differences in contributions of individuals: and (3) in today’s legal climate, formal performance appraisal is essential to defend the organization’s negative actions against individuals, particularly those that adversely affect members of minority groups protected by law.(Patten T.H., 1982)

Second, performance appraisal is a serious activity whose conduct is fraught with consequences for both the individual and the organization. From the organization’s perspective, a faulty assessment can result in false positive (rewarding bad performance) as well as false negative (failing to reward good performance) errors. From the individual’s perspective, results of performance appraisal have implications for the future relationship with the employing organizations. In practice, there is a good measure of rational thought and emotional intelligence involved in setting the appraisal system into motion. The key targets to be achieved need to be discussed between employee and manager, so that the former is genuinely able to commit to the challenge. The criteria to be used are frequently a source of discontent, sometimes for both parties. The criteria need to be achievable as well as measurable, and contingency considerations taken into account in case of totally unexpected events affecting the employee’s performance. The criteria employed should be such as to encourage the employee to rise to the challenge, and be neither irrelevant nor over-enthusiastic, both of which can be de-motivating. The criteria are almost certain to contain some element of timing, and here again the need for results has to be balanced against what is reasonably possible in a given time frame. Positive appraisals can result in the renewal of membership as well as promotions, pay raises and other rewards. Negative appraisals, on the other hand, can result in demotions, and even termination of membership. (Murphy K. R. & Cleveland J. N., 1991)

Third, performance appraisal is a complex activity that confronts even the most well-meaning appraiser with a maze of interrelations that frustrate assignment of clean, accurate, and merit-based ratings. Moreover appraisal gets progressively more complicated with the introduction of additional variables and quality demands. Even modest increments in complexity add disproportionately to the challenge. In theory, the evaluation of employee performance might seem to be a straightforward process, but in practice several problems often produce adverse reactions to performance appraisal. McGregor, in his now classic article “An Uneasy Look at Performance Appraisal,” argues that managers are uncomfortable when they are put in the position of “playing God.” This unwanted judgmental role is thought to be one important reason for managerial resistance to performance appraisal processes. McGregor argues that judging the personal worth of another individual conflict with “the respect we hold for the inherent value of the individual “. (McGregor, Douglas, 1957)This argument is advanced by others who, like McGregor, see performance appraisal as creating a situation in which the superior must behave in a “threatening, rejecting, and ego-deflating” manner with those employees judged to deserve criticism. (Likert R., 1959) Yet others, such as Maier, point out that the appraisee can be expected to act defensively when criticized by supervisors. (Maier, Norman R.F., 1958)Take the relatively simple case of the waiter serving food in a restaurant. Customer satisfaction is the result of a large number of variables (e.g. , menu, quality of ingredients used, skills of cooks, coordination among different personnel, physical atmosphere) brought into alignment by a chain of decisions and behaviors involving  the entire restaurant staff as well as the suppliers who furnish the ingredients. To reward or to punish any one person for satisfaction of restaurant customers would be both inaccurate and unfair. As complexity increases, it becomes progressively more difficult to meet the criteria that good appraisal systems need to meet: i.e., observability, measurability, job relatedness, importance to job success, controllability, and practicality. (Cascio W. F., 1991)

The fourth reality is that performance appraisal tends to get entangled in politics of organizations. This is partly due to the complexities of the process, and also to the nature of human organizations. While joining hands to produce a valued output, individuals also compete with each other for a share of the returns of organizational success. (Burns T., 1966) When sitting in judgment on co-workers, therefore, there is an ever-present danger of the parties being influenced by the political consequences of their actions in appraising performance-rewarding allies and punishing enemies or competitors. (Longenecker C.O. et al, 1987)

A critical element influencing the potential success of an appraisal system is the reaction to the system of those persons being evaluated (Carroll & Schneier, 1982; Murphy & Cleveland, 1991). One particular type of employee reaction that has been found to be related to acceptance or rejection of appraisal is the perceived fairness of an appraisal system (Murphy & Cleveland, 1991). Bretz, Milkovich,and Read (1992), in their summary of three large scale surveys of U.S. private sector organizations, identified fairness as the most important performance appraisal issue that organizations face.

Murphy and Cleveland (1991) note that the organizational justice literature (Greenberg,1990) may provide a fruitful theoretical background for research on factors affecting perceptions of appraisal fairness. Basically, organizational justice theory posits two categories of justice- procedural and distributive. Procedural justice pertains to the fairness of procedures used in determining outcomes, while distributive justice is concerned with fairness of the outcomes themselves. A limited amount of appraisal-related research has been performed within this framework. Although not explicitly conducted under the “organizational justice” rubric, early research (Landy, Barnes & Murphy, 1978; Landy, Barnes-Farrell, & Cleveland, 1980) indicated that appraisal procedures and processes (e.g. opportunity to express feelings) influenced employee perceptions of fairness and accuracy to a greater degree than did the specific ratings employees received. Greenberg (1986) identified procedural and distributive justice factors of perceived appraisal fairness. The procedural factor was composed of five variables (e.g., two-way communication during the appraisal session), while the distributive factor contained two variables (e.g., receipt of rating based on performance achieved). Folger and Konovsky (1989) found that appraisal-related procedural justice factors contributed more unique variance toward the prediction of trust in supervisor and organizational commitment than did salary-related distributive justice measures, whereas the distributive justice measures predicted more unique variance for satisfaction with pay than did the procedural justice factors.

This study concentrates on the application of due-process metaphor, which gives the employees considerable opportunity to present their views throughout the appraisal process with Intercontinental Bank Plc. Aba Branch as the major case study. The due process metaphor of performance appraisal is consistent with prior theoretical models of procedural justice.

1.2 STATEMENT OF THE PROBLEM