The main objective of this study is to examine the relationship between performance appraisal and employee productivity. In this research, the descriptive research method was employed; the survey study approach was adopted. However, for the sake of time constraint the population of the study comprises fifty five (55) senior and junior staff of three (3) commercial banks on Aba Road, Port Harcourt; First Bank Plc, GT Bank and Zenith Bank Plc, Port Harcourt, Rivers State while the random sampling method was employed to select one hundred and twenty respondents (55) respondents. The data for this study was collected with the use of structured questionnaire. The chi-square analytical tool of SPSS version 20.00 was used to analyse the data electronically. From the analysis, the study finds out that the dimensions of performance appraisal significant influence and enhances employee productivity in the selected manufacturing firms. As such, the study therefore concludes among others that: that organizations should establish and adopt performance appraisal systems that would enable effectively appraisal of the employees and therefore providing opportunities to the management in identifying staff training needs, identify performance targets, improve employees performance and helping employees on time management through planning and setting of deadlines, that firm should adopt behavioural performance appraisal system and management by objectives as the appraisal systems were found to be statistically significant in influencing employee’s relationship and improving employee’s productivity and that performance criteria used need to be clarified to employees. The performance criteria need to be explained to the employees so that they are aware of what is expected by the management.
Table of Content
TITLE PAGE 1
AUGUST, 2019. 1
COVER PAGE 2
List of Tables 10
List of Figures 11
CHAPTER ONE 12
1.1 Background of the Study: 12
1.2 Problem Statement 15
1.3 Objectives of the Study: 16
1.4 Research Questions: 17
1.5 Research Hypotheses: 17
1.6 Significance of the Study: 18
1.7 Scope and Limitation of the Study 19
1.8 Definition of Terms: 20
CHAPTER TWO 22
REVIEW OF RELATED LITERATURE 22
2.1 Conceptual Framework: 22
Fig. 2.1: A Conceptual Framework on Performance Appraisal and Employee Productivity 22
2.1.1 Concept of Performance Appraisal: 23
2.1.2 Dimensions of Performance Appraisal: 24
2.1.3 Employee Productivity 28
2.1.4 Measures of Employee Productivity 29
2.1.5 Effects of Performance Appraisal on Employee Productivity 33
2.2 Theoretical Framework: 35
2.2.1 Organization Theory 35
2.2.1 Systems Theory 36
2.3 Empirical Framework: 37
CHAPTER 3 40
RESEARCH METHODOLOGY 40
3.1 Research Design 40
3.2 Population of the Study 41
3.3 Sample Size Determination 41
3.4 Sampling Techniques 43
3.5 Source and Method of Data Collection 43
3.6 Methods of Data Collection 44
3.7 Questionnaire Design 46
3.6 Data Analytical Techniques 46
3.7 Reliability and Validity 47
CHAPTER 4 49
DATA PRESENTATION AND ANALYSIS 49
4.1 Data Collection and Presentation 49
Table 4.1: Questionnaire Administration and Retrieval 49
4.2 Data Analysis 50
Frequency Table 50
Sex of Respondent 50
Age of Respondent 51
Educational Qualification 51
4.3 Hypotheses Testing 54
Does Graphic rating scale (GRS) influence employee productivity in selected commercial banks in Port Harcourt? 55
Test Statistics 55
Does behaviorally Anchored rating scales (BARS) influence employee productivity in selected commercial banks in Port Harcourt? 56
Test Statistics 56
Does Management by Objective enhance employee productivity in selected commercial banks in Port Harcourt? 57
Test Statistics 58
4.4 Discussion of Findings 58
CHAPTER FIVE 60
SUMMARY, CONCLUSION AND RECOMMENDATIONS 60
5.1 Summary 60
5.2 Conclusion 61
5.3 Recommendations: 62
APPENDIX II 68
List of Tables
Frequency Table 37
Sex of Respondent 37
Age of Respondent 37
Test Statistics 40
Test Statistics 41
Test Statistics 42
List of Figures
Fig. 2.1: A Conceptual Framework on Performance Appraisal and Employee Productivity 19
1.1 Background of the Study:
Organizations are established to perform certain tasks and use different cadre of staff to achieve their objectives. To maintain standards and anticipated outputs organizations have to keep abreast with both new knowledge and technological advances. This fast growing challenge requires that organisations engage or update their staff so that they can cope with the rate of generation of new changes in these areas. Some of the coping mechanisms applied by organizations are recruitment of trainable staff, reproofing of present staff, in service training in certain disciplines and on the job training including exchange programmes.
A performance appraisal system is a good instrument that can be used to improve the quality of an organization’s work force performance of which it is considered as an important aspect in human resources management and as part of the control process in administration (Kavussi Shal, 1999). In order for an organisation to achieve its objectives, planning of the appraisal process is an important subject who should be undertaken to enable it achieves the objectives like work force development, including improvements, promotions and assignments in managerial positions, persuasion and punishment, salary increase, personnel’s performance feed back and determining their educational needs.
Therefore, an appraisal can be considered as an important factor in identifying the people’s talents and capacities and its results can make them aware of advancements, plans and goals. An organization, it self, needs to detect the employees efficiency to improve the manpower’s status, for the purpose of increasing the volume of the production and services and making positive changes in its trend (Kavussi Shal, 1999).
Appraising performance is important because since it helps to ensure that the organization system will be easily understood by employees and effectively put into action by managers. Appraisal structures that are complex or impractical tend to result in confusion, frustration, and nonuse. Likewise, systems that are not specifically relevant to the job may result in wasted time and resources. Indeed, most successful appraisal programs identify and evaluate only the critical behaviors that contribute to job success. Systems that miss those behaviors are often invalid, inaccurate, and result in discrimination based on nonrelated factors.
Performance appraisal should be conducted periodically to evaluate an employee’s performance measured against the job’s stated or presumed requirements. It is important that members of the organization know exactly what is expected of them, and the yardsticks by which their performance and results will be measured. Laurie J. Mullins substantiated the necessity of an effective appraisal scheme by saying that it can identify an individual’s strengths and weaknesses and indicate how such strengths may best be utilized and weaknesses overcome.
The appraisal system should be formalized especially in supporting decisions on salary and wage increases, transfers, promotions and dismissals, as well as communicating information to appraise through a review of their progress. Results of performance appraisal are used to discuss performance and progress of personnel in relation to goals. Performance strengths are recognized and weaknesses identified so that individual action plans can be developed to make the necessary corrections. The performance appraisal method applied should be valid. There must be a clear link between the performance standard for a particular job and an organization’s goals and this should be measured accurately by the method. Appraisers should be thoroughly trained in purpose and utilization of the performance appraisal system. (Wolf, C. 2005).The performance appraisal method applied must be sensitive in distinguishing effective performers from ineffective performers/ the performance appraisal method should be reliable in that different raters using the same method will rate the same employee similarly. The performance appraisal method should be easily understood by both raters and the employees. (Fletcher, C. (2004)).
1.2 Problem Statement
Performance appraisal system (PAS) is a critical component of the overall human resource management function in the civil service and indeed the World Health Organization There is an increasing use being made of the performance appraisal process ((Meyer, 2001), generally motivated by an organizational desire to affect employee behaviors and attitudes and, ultimately, organizational performance (Boyd, 2004). This occurs because of the establishment of goals at the beginning of the evaluation cycle, which provides employees with clear performance targets, the monitoring of performance during the evaluation cycle (which can be used to assist poor performers) and the reinforcement provided for good performance through the provision of rewards, usually in the form of higher pay.
The capacity to achieve these positive outcomes will be a function of the quality of the performance appraisal (PA) experience. PA is a complex process and there is scope for variation, particularly when the supervisor is required to make subjective judgments of employee performance; principles of work planning, setting of agreed performance targets, feedback and reporting. It is linked to other human resource management systems and processes including staff development, career progression, recruitment, placement, incentives and sanctions (Milkovich and Boudreau, 2004).
Much of the previous study had focus on employee motivation and staff appraisal in the government. Oluoch P. (2007) conducted A Survey of the Relationship between Performance Appraisal Practices, Motivation and Job Satisfaction of Commercial Banks in Nairobi; Fletcher, (2002)conducted a study on the effect of staff appraisal on employee performance in the Ministry Of Energy. There is no known study that has focused on effects of performance appraisal on employee’s productivity in the commercial banks in Port Harcourt; This study therefore seeks to fill this knowledge gap by determining the relationship between performance appraisal and employee productivity in selected commercial banks in Port Harcourt.
1.3 Objectives of the Study:
The main objective of this study is to examine the relationship between performance appraisal and employee productivity. In specific terms, this study shall:
1. Examine the relationship between Graphic rating scale (GRS) and employee productivity in selected commercial banks in Port Harcourt.
2. Examine the relationship between Behaviorally Anchored rating scales (BARS) and employee productivity in selected commercial banks in Port Harcourt.
3. Examine the relationship between Management by Objective and employee productivity in selected commercial banks in Port Harcourt.
1.4 Research Questions:
In a bid to achieve the above stated objectives, the following research questions will guide the conduct of this research work:
1. Does Graphic rating scale (GRS) influence employee productivity in selected commercial banks in Port Harcourt?
2. Does behaviorally Anchored rating scales (BARS) influence employee productivity in selected commercial banks in Port Harcourt?
3. Does Management by Objective enhance employee productivity in selected commercial banks in Port Harcourt?
1.5 Research Hypotheses:
HO1: there is no significant relationship between Graphic rating scale (GRS) and employee productivity in selected commercial banks in Port Harcourt.
HO2: there is no significant relationship between Behaviorally Anchored rating scales (BARS) and employee productivity in selected commercial banks in Port Harcourt.
HO2: there is no significant relationship between Management by Objective and employee productivity in selected commercial banks in Port Harcourt.
1.6 Significance of the Study:
The aim of this study was to examine the effect of performance appraisal on employee productivity in commercials banks in Port Harcourt. The researcher believes that the completion of this research will be of great significance to all and sundry. It will of great importance for government, organizations and the society and even private individuals.
First and foremost, the findings of this study will add to existing knowledge that will aid in understanding of the importance of performance appraisal in general and its relevance to employee productivity, which in turn leads to organizational performance.
To researchers and academicians, the study will serve as a reference to other researchers who intend to conduct similar or related studies on performance appraisal in the future as it will provide reliable insight that are useful for educational purposes. This study has also provided information that could form the basis for future research.
To employers and management of organizations, this study has provided in-depth knowledge explaining how performance appraisal has an effect on employee productivity. The study provides key information in terms of recommendations and suggestions that will be useful in improving the general policies and practices of management in organizations. It provides information that will help organizational leaders to be able to make out solid strategies and best practices for hiring or recruiting, developing, retaining, engaging and motivating a high performing workforce. This study is also beneficial to organizations striving to create a culture that is inclusive rather than exclusive.
1.7 Scope and Limitation of the Study
The scope of this study is delimited into the followings:
Content Scope: The specific areas of employee productivity the study investigated include; profitability, efficiency and effectiveness. Whereas, the areas of performance appraisal include Management by Objective, Behaviorally Anchored rating scales (BARS) and Graphic rating scale (GRS).
Geographical scope: This study covers an examination of strategic contributions of performance appraisal and employee productivity of some selected commercial banks in Port Harcourt which include three (3) commercial banks on Aba Road, Port Harcourt; First Bank Plc, GT Bank and Zenith Bank Plc, Port Harcourt, Rivers State.
Unit of Analysis: This is a micro study because it is interested in ascertaining the relationship between performance appraisal and employee productivity in this direction. Hence, it is a micro level study.
The major limitation of the study is the short time frame the research lasted, coupled with the tight academic time table, which prevented a very comprehensive study. The fund available to the researcher was also limited and therefore the study was limited to a small portion of the survey population.
1.8 Definition of Terms:
Graphic rating scale (GRS): This presents appraisers with a list of dimensions, which are aspects of performance that determine an employee’s effectiveness.
Behaviorally Anchored rating scales (BARS): this is a predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc).
Management by Objective: this is a management system designed to achieve organizational effectiveness by steering each employee’s behavior toward the organization’s mission.