CHAPTER ONE

INTRODUCTION

1.1             Background of Study

Growth is essential to organization’s survival. Without it, the organization will find its competitive position weakened as rivals increase their hold on the market; eventually it will either suffer a declining market share or succumb to a takeover. In addition, growth offers a greater opportunity to satisfy the aspiration of the diverse interests within organization. It should be borne in mind that willingness to grow is not sufficient. Condition both within and outside the organization must be favourable to growth if this is to be achieved.  The human resources have been identified as a critical factor in organization growth. Ever since the time of Abraham Taylor (1856-1951) productivity improvement in organization had been an issue of great concern (Idemobi and Onyeizugbe, 2011). It is noted that there is negative influence of group on performance.  As a result Abraham Taylor broke informal group activities through spatial and work-flow designs and individual piece rate system of pay. Taylor had based his management system on production-line time studies. Instead of relying on traditional work methods, he analyzed and timed steelworkers’ movements on a series of jobs.  He therefore, encouraged employers to pay more productive workers at a higher rate than others, using a “scientifically correct” rate that would benefit both company and worker. Thus, workers were urged to surpass their previous performance standards to earn more pay.  Rather  than  quarrel  over  profits,  both  management  and  workers  should  try  to  increase production and by so doing, he believed, profits would rise to such an extent that labour and management would no longer have to fight over them. What this analysis seems to suggest is that the  productivity  of  an  organization  is  jointly  determined  by  the  efficiency with which the organization utilizes several available factors of production which invariably are  scarce relative to the demand for them. In other words, organizations can only win a competitive advantage through people (Obisi (2011).

However, the importance of effective employees’ performance appraisal system cannot be underscored. In this ever increasing and competitive world,  organizations  can  grow  to  the  extent  that  people  who  work  in  such organization are supported to grow. It has been reported by researchers that many Nigerian business organization pay less attention to performance appraisal system despite the believe that management and labour had a common interest in increasing employees’ productivity in the organization, evidence in the literature also suggests that 44% of organizations worldwide use performance measurement systems as a mechanism to improve employee performance (Idemobi and Onyeizugbe, 2011). Yet, many Nigerian Organization view performance appraisal and conduct it solely in terms of its evaluative aspect thereby overlooking its use to facilitate growth and development in employees through training, coaching, counseling and feedback of appraisal information (Obisi, 2011). Nigerian business organizations need to view performance appraisal as a major management practice to assess the immediate and future relevance of their workers. By so doing, employees will contribute more to the achievement of their business organizations’ goal and objectives.

However, it should be borne in mind that performance appraisal system facilitates communication between the employees and their immediate supervisor by providing a structure for feedback on performance.  This demands that employees should understand the need for performance appraisal to improve productivity. Once this is understood, the employees and supervisors or managers have to define the expectations by using the job description. Also, supervisors should conduct reviews regularly during the year in order to discuss the employee’s progress toward accomplishing desired results and to address ongoing issues. Good employee relations are built upon fair and equitable treatment. It is important that treatment of employees must be based on definite standards, applied fairly and without discrimination. There are seven performance factors identified for all employees and one additional optional factor. They include communication, customer service, cooperation/teamwork, quality, productivity/core organizational/business skills, job knowledge/technical proficiency and professionalism (Wikipedia contributors, 2014). In the performance level, it should be borne in mind that manager will rate each performance factor, on a scale of 1 to 5, as it relates to employee performance. Specific, objective comments may be included to support the ratings. Managers and employees must share a common understanding of what each rating signifies, and use them consistently. There are four performance levels documented in the existing literature. The first performance level is the outstanding that is reserved for individual whose work performance is clearly and consistently superior to the standards required for the position. This caliber of performance is easily recognized by others in related areas as well as outside of the individual’s own group or function. The individual is successful in unusual and adverse situations, meets extraordinary business challenges with little or no guidance, and sets a positive example for others. Results significantly exceeded performance standards/objectives over a sustained period. Second is the expectation that explains how individual exceeds most requirements of the position, including all key areas. This rating demonstrates a level of accomplishment that goes beyond reasonable and demanding standards, particularly in key knowledge, skills and abilities. Performance is characterized by high achievement and the individual demonstrates planning and execution of all routine functions and most major functions with minimal guidance. Third, achieves expectations describes how individual demonstrates a level of accomplishment that clearly fulfills expectations and at times exceeds them. It reflects good, solid and consistent performance. Has demonstrated ability to execute and control routine functions and several major functions with occasional guidance. Four, minimally meets expectations shows how individual demonstrates a level of accomplishment that is below the standards of performance and does not meet or marginally meets the requirements. This individual demonstrates an inconsistent level of achievement and requires more direction and guidance than normally expected for routine function.