CHAPTER ONE
INTRODUCTION
1.0 Background of the study
The importance of performance appraisal in contemporary business organizations cannot be overemphasized. Some view it as potentially “the most crucial aspect of organizational life” (Lawrie, 1990). Performance appraisal has increasingly become an integral part of the human resource function of any profit – making organization.
Performance appraisal when practised effectively, to a larger extent can contribute to growth of an organization. According to Macmillan English Dictionary for Advanced Learners (2002), “growth is an increase in the success of a business or a country’s economy or in the amount of money invested in them”. Any profit-making organization will seek to achieve growth in terms of sales, profit or expansion through performance.
Growth has been ingrained in Americans as “the path of success”. Organizational growth cannot be a reality if the performance of its workers is not appraised for an improvement or reinforcement of performance. According to Donegan (2002), “success will to a larger extent depend on the organization’s ability to evaluate progress and also hold accountable those charged with executing certain tasks”. This is exactly what performance appraisal seeks to do. It aims at evaluating the performance of the worker against standard set thereby taking corrective actions if necessary.
In many organizations performance appraisal is used for the purpose of administering wages and salaries after feedback had been given to the worker. The appraisal also helps management to identify individual employee’s strength and weakness. The latter will lead to training and other measures to correct inefficiencies.
Performance appraisal may be viewed as an overall measure of organizational effectiveness. Organizational objectives are met through the efforts of individual employees. Teaching employees how to do their jobs and evaluating their performances are strategic human resource function and for that matter should not be relegated to the background.
“Maximizing performance is a priority for most organization today”, Mathis et a1 (2004). It is then obvious that performance appraisal as a management tool is cardinal to contributing to organizational success. If employee performance is improved, the organization raises it performance in terms of meeting it objectives. On the other hand, if employee performance is not improved it adversely affects performance hence organizational productivity.
Perfom1ance appraisal cannot exist independently. It needs to be closely linked to set standards by managers and supervisors. This will in the end have direct effect on the main goal of the organization. There is the need therefore to have a well-defined appraisal system in organizations to enable management know how well individual workers are performing on their job and if there is the need to improve performance or reward performance.
Globally, performance appraisal is used and this has led most organizations to spend quality time in conducting performance appraisal. According to Torrington and Mackey 350 organizations have a formal appraisal system for senior management, compared with 251 organizations for middle management, 189 for clerical staff, and 92 for manual, unskilled and semi skilled workers. Over a quarter of the respondent organizations carried out no appraisal at all. It is interesting to note that 140 organizations said that they had increased the time that they spent on appraisal over the previous three years, compared with 112 organizations that spent the same amount of time, and only 29 organizations where the time spent had decreased. In my understanding, it points out to the fact that many organizations in the world today had realized the tremendous need for performance appraisal systems. If it is done well could yield the desired results for the organization.
The Provisional National Defense Council (PNDC) Law 160 established the Ghana Ports and Harbours Authority (GPHA) – Tema Port on July, 1st 1986. Since its establishment perfOTIl1anCe appraisal is being used as a management tool to assess and improve performance of its employees thereby increasing the overall output of the Port in terms of productivity.
It is a well known fact that the growth and success of an organization to a very large extent depends on the performance of its employees which could be measured by performance appraisal. It could therefore be said that performance appraisal is a key elements in today’s competitive era of business in which Tema Port is not left out.
Performances of Port workers at Tema at the various levels are very important and contribute to achieving the goals of the Authority. The Port therefore expects every worker to contribute towards the achievement of its goals. This is evident by management showing much commitment in the use of performance appraisal by putting in place mechanisms for instance logistical support and time to ensure the success of the scheme. Additionally, the Port of Tema has a training department which apart from other training purposes organizes training programmes for employees who are under-performing to correct deficiencies after being appraised. This goes a long way to improve the skills, knowledge and competences of employees to perform their task effectively and efficiently. The human resource department and the training department collaborate to conduct appraisals of the Port which is carried out annually. Before the process commences, appraisals forms are distributed to the various departmental heads for assessment or evaluation of subordinates. The completed forms are submitted back to the human resource department for final review and decision making.
Just as any other industry, it is important to note that the Ports and Harbour industry worldwide aim at efficiency and as a result of the role performance appraisal plays in organizations, the researcher attempted to find out how management uses performance appraisal as a management tool to assess and improve the performance of its workers thereby contributing to the productivity,
growth and success of Tema Port.
1.1 Statement of the problem.
Performance has played significant roles in organizational productivity. However, it is pathetic to note that most organizations have not been practising a sustainable performance appraisal system to enhance efficiency.
Some organizations though invest so much in other factors of production such as machinery, information technology, funds etc but unfortunately place little value on manpower. In this regard, little attention is directed to improving the human capital which is the anchor of every organizational success story. Improving manpower requires that performance appraisal becomes an essential tool to assess the individual employee and should be based on consistent feedback such that an appropriate reward system could be ascribed or measures for correction could be put in place.
Lack of performance appraisal system in most organizations unfortunately makes assessment of individual employee extremely difficult and m that vain most organizational targets are not periodically achieved hence lack of direction and low productivity.
In this regard therefore, it is imperative that a consensus effort is made by every organization to have a performance appraisal policy in order to’ evaluate the performance of individual employees in conformity with the overall objective of the organization.
1.2 Objectives of the study
The objectives of the study are classified into General and Specific.
1.2.1 General objective
The main objective underlying this study is to assess the performance appraisal situation at Tema Port.
1.2.2 Specific objectives
a) To find out how the design and implementation of performance appraisal is done at Tema Port.
b) To evaluate the importance of performance appraisal system at Tema Port.
c) To identify the problems encountered when conducting performance appraisal at Tema Port.
d) To find out whether performance appraisal contributes to productivity and growth at Tema Port.
e) To provide some recommendations towards improving performance appraisal system at Tema Port.
1.3 Research Questions
i. What performance appraisal system is in place at Tema Port?
ii. What is the role and importance of performance appraisal to the growth at Tema Port?
iii. Is performance appraisal contributing to the productivity and growth at Tema Port?
iv. What problems are encountered during performance appraisals at Tema Port?
1.4 Rationale for the study.
Managers must be able to determine whether or not their workers are doing an efficient and effective job, with a minimum of errors and disruption. They do so by using perfonl1ance appraisal (Nickels, et al 2002). According to Mullins (2002), “The underlying objective of performance appraisal is to improve performance of individuals leading to improvement in the performance of the organization as a whole”. An effective appraisal scheme therefore offers a number of potentialbenefits to both the individual and the organization. It is important therefore that, for the desired benefits of performance appraisal to be achieved, the challenges that it poses during the process need to be identified and addressed.
The role of GPHA- Tema Port in the economic growth and development of the nation cannot be a mere exaggeration. Just as a seaport is the lifeline of any country, so is the Port of Tema which provides about 90% of Ghana’s export and import services. It is in this regard that the researcher attempted to undertake a study to assess how management of Tema Port evaluate the performance of its workers thereby contributing to its productivity and growth and also essentially, providing revenue to the state. The study also offered some suggestions and recommendations to the Authority. This will help management to take good decisions and identify strategies that will help improve worker performance to enhance growth.
1.5 Scope of the study
The study is concentrated on an assessment of performance appraisal. This was limited to only Tema Port and it covers all the departments. Tema Port has 14 departments namely Personnel! Administration, Marine Operation that is fire and safety, Port Operations that is monitoring and control, Marine Engineering, Materials department, Management Information System (MIS), Security, Finance, Audit and Mechanical Engineering.
1.6 Limitations of the study
Every research studies certainly have some limitations. The major limitation to this research work was finance. This limitation informed the researcher to concentrate the work at only Tema Port. Also, time factor was another limitation that is combining lectures with the research work. Finally, the researcher had to visit the Port of Tema several times before retrieving the questionnaires administered.
1.7 Definition of terms
Performance appraisal: Refers to the process by which employees are evaluated on the taskassigned them after a given time in order to find out their strengths and weaknesses. Under-performing employees:Refer to those employees who perform below average or thoseemployees who normally do not meet targets set for them.
Growth: This refers to the general improvement of performance of the organization.
Appraisers: They are managers, superiors, or supervisors who have employees working directlyunder them.
Appraises: They are employees or subordinates who are appraised.
1.8 Organization of the study
The study is organized into five chapters. Chapter one is the Introduction of the study. This is made up of the background of the study, statement of the problem, objectives of the study, rationale for the study, scope of the research, limitations of the study, research questions, and definition of terms and organization of the study.
Chapter two dwells mainly on the literature review, while chapter three consists of the research methodology and the organizational profile. Chapter four involves the analysis and discussion of results. Finally, chapter five concerns summary of findings, conclusion and recommendations.
PERFORMANCE APPRAISAL AS A TOOL FOR ORGANIZATIONAL PRODUCTIVITY AND GROWTH (A CASE STUDY OF GHANA PORTS AND HABOURS AUTHORITY)
