THE IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEE PRODUCTIVITY

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Performance appraisal is one of the basic tools that make workers to be very effective and active at work. A critical look out on this may bring about the need for motivation, allowances, development, training and good human relationship in an organization.

Performance appraisal is defined as “a structural formal interview between subordinate and supervisor, that usually takes the form of periodic interview (annually or semi-annually), in which the work performance of the subordinate is examined and discussed, with the view of identifying the weaknesses as strengths as well as opportunities for improvement and development” Decenzo and Robbins, (1995: 358).

The essence of performance for most organizations is delivering products and services that meet or exceed customer expectations, thereby creating a competitive advantage so that customers are retained and market share is increased (Sasson, Alvero & Austin, 2006). Another view is that a performing business is one that maximizes shareholder value, thus maximizing the difference between input costs and revenue (Copeland, 1994). This is often a controversial statement since organizations in Europe and Japan expect a balance between all the stakeholders (Copeland, 1994:97), and is supported by the view of Neely, Adams and Kennerley (2002) as part of their Performance Prism which includes all the stakeholders and not only the shareholders.

Two more general definitions of "performance" are that performance is a "…particular action, deed or proceeding / the execution or accomplishment of work, acts, feats, etc." or "the manner in which or the efficiency with which something reacts or fulfils its intended purpose" (Dictionary.com, 2010). These definitions show that it is about performing work in an efficient way. This compares with the very simple but clear definition provided by Dunnette and Fleishman (2000) that performance is "…the results or outcomes of work", thereby opposing it to behaviour. They state that "… performance is the end result and behaviour is the means to that end" therefore performance is an accomplishment or output. Two fundamental dimensions of performance is efficiency (or resource utilization) and effectiveness (the meeting of requirements) (Neely et al., 2002). In these two dimensions lies the essence of productivity, namely that productivity is normally calculated as output divided by input (Productivity = Output/Input) (Latham & Wexley, 1994), such as number of products delivered in relation to resources used.

1.2 STATEMENT OF THE PROBLEM

Low productivity is usually the negative effect of lack of performance appraisal, absence of performance appraisal brings about staff low job performance.

 Labour union always get into the matters of employees well being at work and also in their personal lives so that they can give their full at work. But some time it has a negative impact on performance appraisal and the management to give promotion or rise in the salary on the bases of seniority.

The basic aim of every business organization is to achieve its objectives, goals or targets successfully. Goals set by organization will only be in vain if much attention is not paid to employees’ effort or performance for successful accomplishment. In other to achieve set goals and objectives successfully, there is the need to focus on performance appraisal. Performance Appraisal should be linked to attractive incentive to employees, enabling workers to demonstrate higher productivity.

Most organizations in the competitive market fail since their workers perform below standard for they are not encouraged to work harder. Managers and employees are the life blood of every business organization. If management does not invest much into the welfare of their workers, problems are bound to rise leading to industrial strike actions, low commitment to work, low morale and low productivity of goods and services.

Attractive appraisal systems are established by some business organizations to help motivate their employees to strike hard to be recognized and rewarded. Once employees are motivated, their performance reflects on productivity. Employees strive hard by pooling together skills, knowledge and efforts to achieve maximum output. Hence the essence of this paper is to find out the part played by performance appraisal.

1.3 OBJECTIVES OF THE STUDY

The aims of this study are;

To examine the relationship between performance appraisal and employees’ productivity To examine the ways in which performance appraisal has impacted employees performance To help managers review past performance and improve current performance. To provide employees with necessary information pertaining to recognition of their work. To know if performance appraise enhances productivity.

1.4 RESEARCH QUESTION

1.     Does performance appraisal have positive impact on employees’ performance?

2.     How often are employees appraised at the work place?

3.     Is performance appraisal an ongoing process in the company?

4.     Is feedback information received after performance appraisal?

 

5.     Is performance appraisal helpful in identifying strengths and weaknesses?