THE EFFECT OF PERFORMANCE MANAGEMENT PRACTICES ON EMPLOYEE PRODUCTIVITY (A CASE STUDY OF SCHINDLER LIMITED)

ABSTRACT

 The general objective of the study was to determine the effect of performance management practices on employee productivity with a focus on Schindler Limited. The study was guided by the following research objectives: To investigate the influence of performance appraisals on employee productivity, to determine the influence of reward systems on employee productivity and to examine the influence of performance feedback on employee productivity.

This study used the descriptive research design. The study adopted a quantitative approach on the effects of performance management practices on employee productivity. The dependent variables included performance appraisals, reward systems and performance feedback, and the implications on employee productivity as the independent variable. The target population comprised of 108 Schindler employees in Nairobi, Kisumu and Mombasa branches in Kenya. Stratified sampling was used to divide the population into two strata. Descriptive statistics was utilized as a data analysis tool. The demographic profiles of the respondents were analyzed using percentages and frequencies. Inferential statistics such as correlation and regression analysis established the relationship between dependent and independent variables.

In regards to the influence of performance appraisals on employee productivity, the findings suggested that the appraisal leads to enhanced employee performance in organization. An effective appraisal model can enhance the interest and performance of the employees leading to the completion of specific targets geared towards attainment of corporate goals.

In regards to the influence of reward systems on employee productivity the findings suggested that employees can be rewarded to meet target productivity levels. The opportunity by the manager to formally recognize good employee performance leads to work motivation. When good performance is observed and then rewarded, the chances of it being repeated are increased, while poor performance is discouraged or even punished to decrease the chance of it happening again.

In regards to the influence of performance feedback on employee productivity, the findings indicated that effective feedback is essential for any organization to meet its target. Feedback enables the employees to be made aware of what exactly is expected from them. Effective performance feedback between employees and supervisors is the key to successful empowernment and productivity. Adequate feedback builds accountability, since employees and supervisors participate in developing goals, identifying competencies, discussing career development and employee motivation.

The study concluded that effective performance management practices gives employees opportunity to express their ideas and expectations for meeting the strategic goals of the company. Performance management practices could be an effective source of management information and renewal. The use of reward system has been an essential factor in any company’s ability to meet its goals. Effective feedback on performance measurement may translate to improved employee productivity. Feedback enables the employees to be made aware of what exactly is expected from them.

The study recommends that the performance management practices should be optimized to improve employee performance. Performance reviews should be focused on the contributions of the individual employees to meet the organizational objectives. For every opportunity possible, the manager should formally recognize good employee efforts for enhanced work performance. Effective performance management practices that edify appraisal, reward and feedback should be used to achieve organization goals and enhance employee productivity.