CHAPTER 1INTRODUCTION1.1 Background of the StudyIn today’s competitive business world, it is understood that organizations can only compete with their rivals by innovating. Organizations can only innovate by managing their human resources well. The human resource system can become more effective by having a valid and accurate appraisal policy used for rating performances of the employees. Unfortunately, the number of organizations using an effective performance appraisal policy is limited (Yalcin, 2002).Performance appraisal is a key in human resource management function which is viewed as a subset of performance management. Rao (2005) argues that performance appraisal is a method of evaluating the behavior of employees in the workplace, this normally include both the quantitative and qualitative aspects of job performance. It helps to identify and overcome the problems faced by the employees in their workplace (Mackey & Johnson, 2000). Although it has many benefits for the organizations, states that performance appraisal have the equal probability of having a bad influence on the organization as well as on employee performance (Nurse, (2005)According to Kuvaas, (2006); performance appraisal or employee appraisal is a method by which the job performance of an employee is evaluated generally in terms of quality, quantity, cost and time typically by the immediate line manager or supervisor. A performance appraisal is a part of the process of guiding and managing career development in both private and public sectors. It involves the task of obtaining, analyzing and recording information about the relative worth of an employee to the organization (Maud, 2001).Accurate appraisals are crucial for the evaluation of recruitment, selection, and training procedures that can lead to improved performance. Appraisals can determine training needs and occasionally, counseling needs. They can also increase employee motivation through the feedback process and may provide an evaluation of working conditions, thus, improving employee productivity, by encouraging the strong areas and modifying the weak ones (Rao, 1994).When effective, the appraisal process reinforces the individuals’ sense of personal worth and assists in developing his/her aspirations. helps firms, industries and nations to achieve sustainable competitive advantage (Maud, 2001). Industry is a thrust area for countries in their quest for competitiveness. It must be noted that banks which have maintained the momentum of continuous growth, and profitability showed better ratio of manpower effectiveness. Each element has crucial sub-components which serve as building blocks for productivity (Rao, 1994).To thrive or survive, organizations need to continuously improve quality, attract more customers, and become more cost conscious. In other words, firms need to better manage their performance appraisal which has the propensity of enhanced employee performance. Over the years, there are many practices, tools, techniques, systems, and philosophies that aim at helping organizations to gain the competitive advantage of higher performance.There has been a widespread use of performance appraisal in work organizations all over the world. This widespread use of Performance Appraisal Systems (PAS) can be attributed to human resource specialists, academics and consultants who proclaim that performance appraisal is a critically needed tool for effective human resource management (Locker and Teel,1997).Formal performance appraisal has become a widespread instrument of human resource management. Surveys reported in the 1970s and 1980s already indicated that between 74 percent and 96 percent of U.S. organizations, and a comparable proportion of British firms had a formal performance appraisal in place. Large, complex organizations are especially likely to conduct formal appraisals (Berry, 2003). Not surprisingly, many firms in Thailand are vigorously implementing Performance Management System (PMS) to help them better manage their employee’s performance and in turn, it affects organizational performance. Since it is the key process through which work is accomplished, it is considered the “Achilles heel” of managing human capital (Pulakos, 2009). Hence, it is very important to manage performance appraisal effectively.Organizations exist to survive in the midst of environmental factors that tend to encroach on business performance. Organizations attempt to maintain the existing state of affairs, but essentially the larger part of their efforts is tilted towards survival (Mindy, 1998). The competition in the industry is getting stronger and firms are adopting different strategies to survive the prevailing competition in the industry. Surviving is the global struggle to meet with increasing demand on firms in the market place has seen by many researchers and academicians as having a resort to pay attention to the individual employees in the organization since innovation in product and services are brought about by these individuals.However, in the review of past studies carried out by Ebue (2003) despite the level of work that has been done, only few studies try to discuss some specific aspects of performance appraisal that can affect survival of organizations. From the foregoing therefore, this study seeks to examine the relationship between performance appraisal and corporate survival in some selected Gas Companies Port Harcourt Metropolis.1.2 Statement of ProblemThis brings us to those problems that are associated with conducting performance appraisals. The process usually starts at the middle management level where it is the job of a middle level manager to appraise his subordinates or employees who are under him. In fact every successive hierarchical level, the superiors are asked to evaluate the employees who are working under them. This can give rise to many issues that make performance appraisals an unpleasant task. As a result, many managers view the process of appraisal as time consuming and burdensome. To begin with performance appraisals can cause friction, resentment and the consequent low morale. Since appraisals are rather subjective in nature, they can also be disputed in case of negative ones.The performance appraisal systems tend to have several problems. Raters‟ evaluations are often subjectively biased by their cognitive and motivational states (DeNisi & Williams, 1988), and supervisors often apply different standards with different employees which results in inconsistent, unreliable, and invalid evaluations (Folger, 1992). In order to create better systems, researchers have traditionally focused on validity and reliability (Bretz 1992) by designing newer “forms” of performance appraisals (e.g., behavioral based systems that better define specific essential job functions of employees or 360-degree feedback mechanisms that allow for cross-validation via multiple raters). However, despite these recent advances in evaluation design, critics continue to argue that performance appraisal systems are not consistently effective (Atkins & Wood, 2002; DeNisi & Kluger, 2000).This study sought to examine performance appraisal and organizational survival.1.3 Objective of the StudyThe main objective of the study is to examine the relationship between performance appraisal and corporate survival in selected oil and gas firms in Port Harcourt, Rivers State. The specific objectives are to:i. Examine the extent to which rating scale associate with corporate survival in selected gas firms in Rivers State.ii. Examine the extent to which ranking associate with corporate survival in selected gas firms in Rivers State.iii. Examine the extent to which management by objectives associate with corporate survival in selected gas firms in Rivers State.1.4 Research QuestionsThe following research questions will guide this study;i. Does rating scale associate with corporate survival in selected gas firms in Rivers State?ii. Does ranking associate with corporate survival in selected gas firms in Rivers State?iii. Does management by objective associate with corporate survival in selected gas firms in Rivers State?

1.5 Research HypothesesWith the research questions in perspective, the followingHO1: There is no significant relationship between performance appraisals and corporate survival in selected gas firms in Rivers State.HA: There is a significant relationship between performance appraisals and corporate survival in selected gas firms in Rivers State.1.6 Significance of the StudyThis study is significant in the following ways;Firstly, this study will be significant to shareholders of these organizations as the survival of the organization is paramount. It will also assist managers manager’s these firms even as it is in their continued survival. It will be relevant to employees in the organization. This study will add to existing knowledge in management sciences.1.7 Scope/Delimitation of the StudyThe study is intended to empirically examine the relationship between performance appraisal and corporate performance. The study limits scope to some selected Gas Companies in Port Harcourt Metropolis, Rivers State with special reference to Ciscon Nigeria Limited, Thompson and Grace Investment Limited.1.8 Limitation of the StudyIn carrying out an investigation of this nature the researcher must of necessity be faced with some constraints.Firstly, the time constraints, the time frame provided for this study was short.Secondly, Financial constraints. Usually, a study of this nature involved some level of expenditure therefore; finance was also a limiting factor.Thirdly, Poor response from the respondent and inability to access the entire population of the study. In the next segment significance of the study will be discussed. Lastly, poor measurement instrument.1.9 Definition of TermsADAPTABILITYAdaptability is the degree to which an organization has the ability to alter behavior, structures; and systems in order to survive in the wake of the environmental change.CORPORATE SURVIVALCorporate survival has been the most interesting topics for organizations over the years. Organizations exist to survive in the midst of environmental factors that tend to encroach on business performance.CUSTOMER SERVICE IMPROVEMENTService quality improvement consists of systematic and continuous actions that lead to measurable improvement in service quality.JOB EVALUATIONJob evaluation is the rating of jobs in an organisation. This is the process of establishing the value or worth of jobs in a job hierarchy. It attempts to compare the relative intrinsic value or worth of jobs within an organization. Thus, job evaluation is a comparative process.

PERFORMANCE APPRAISALPerformance Appraisals is the assessment of individual’s performance in a systematic way.PROFITABILITYProfitability means ability to make profit from all the business activities of an organization, company, firm, or an enterprise. It shows how efficiently the management can make profit by using all the resources available in the market.STAFF DEVELOPMENTStaff development represents an intentional effort by supervisors and administrative leaders of student affairs to improve staff members’ effectiveness, leading to improved organization effectiveness.