The Impact Of Performance Appraisal On The Organization Efficiency

Project and Seminar Material for Business Administration and Management BAM

Abstract

Performance appraisals allow the organization to tell the employee something about their rates of growth, their competencies, and their potentials. The absence of effective performance appraisal is a fundamental cause of low output of staff to work. This study outlines the benefits that can be derived from the use of the performance appraisal system if it is properly administered to workers on the working environment of Cadbury Nig, Plc. It was found out that performance appraisal influences performance positively. However, the researchers realized that performance appraisal is mostly undertaken on annual basis at the workplace. Again, it was also realized that Cadbury Nig, Plc uses rating scale, descriptive system and management by objective system methods of appraisal to evaluate employees. It was also realized that management by objective is the mostly used method. Hence, it showed that appraisal is conducted annually in the organization. Finally, we realized from the research that performance appraisal has got much influence on job performance of Cadbury Nig, Plc employees.

Chapter One

Introduction

1.1 Background of the Study

Institutionalization of performance appraisal started as far back as the industrial revolution when it was used as a means of measuring organizational efficiency (Fundary, 2001). When (1994) affirmed that performance was incepted when the Robert Owen used modern coloured block measure the achievement of employees workers in the cotton utilized as a disciplinary mechanism for punishing for performance (Kennedy and Dresser, 2001). This resulted in the negative notation of appraisal system which turned out to be by both the appraiser and appraise a confirmed by Robert and Pregitzer (2007).

“Performance appraisal is a yearly rite of passage in organizations that triggers dread and apprehension in the most experience bauble hardened manager”. The above quote summarized the extent to which the appraisal process is disliked by the evaluation. Subsequently, organizations tried to refine the methods linking it to other administrative method including reward, promotion, training and so forth arguing the employees achievement should not only the measured but evaluated and managed (Kennedy and Dresser, 2001). Despites the universal, there has been several analysis and with criticism of the effectiveness and use of performance appraisal within the organizational context but up to recent time the issues is skill being debated among scholars academicians and professionals and no system gas been successful is meeting the desire goals.

Performance appraisal is a means of measuring or assessing employee’s achievements within a stated period of time using reliable measurement criteria with the ultimate goals of providing information to superiors on how to improve employee’s effectiveness. There are tons and wind range of literature on performance appraisal. The term has been synonymous with performance management, performance review and performance evaluation. In the book “strategic performance management” the author defined performance appraisal as “a systematic and holistic process of work, planning monitoring and measurement aimed at continuously improving the terms and individual employees contribution to contribution to achievement of organizational goals”. (Akata, 2003).

The depicts performance appraisal is used as a means of establishing future goals, monitoring employee’s process based on specified job description, and measuring performance, teamwork and achievements based on specifying task that can be linked with organizational goals on objectives. Furthermore, performance appraisal is used to formally determine employees effectiveness and contribution (Ikranmullah et al, 2011). In addition Fleteha (2001) opined performance appraisal as a means by which organization develop competency improve employee motivation and achieve equitable allocation of resources. In essences, performance appraisal achieves multiple purposes from measurement to motivation and resource, allocation. As noted by Cleveland, Murphy and William (1989), performances appraisal systems can be used to motivate employment of skills, competences and expertise. In addition, performance evaluation can be said to be a process of measuring employees contribution which turn out to be beneficial both to the suf and the organization of large it carried out properly.

Moreover, Seiden sally and Jessica E. Sowa (2011) believes that the ultimate objective of any evaluation procedure is aligning individual goals and objectives in how they contribute to organizational growth and development. According to Bassey Esu and Inyang (2009), performance appraisal system is a means of investing employee achievement over a certain period of time for achieving organization goals. Consequently, performance appraisal is a means of knowledge sharing among subordinate and superior the adequately measure the process of the employees which will aid in making strategic human resources decisions.

In addition Atiomo (200) agree with Fajana (1997) that performance appraisal is a method of assessing the human resource capabilities and skills and also to identify areas of improvement (Fajana, 1997: Atiomo, 200. Obisi, 2010).

Atiomo (200) noted that, in order for performance appraisal to be effective, there must be clear job description hence, every individual needs to know what his role is the organization can be deduced the performance appraisal is the process through whi0ch an organization collect individuals date in terms of strengths and weakness in order to explore one’s opportunity and potential for development and growth while also determining future threats can be harmful to one’s care and the organizational selling at large which is subsequently communicated.

1.2 Statement of the Problem

Looking on the issue on ground, most organization fails to appraise their staff in which the effect is the organization not recognizing there staff by not appraising than and not give them what their contribution worth in the organization. Implementing and designing and employee’s performance appraisal plan will definitely increase productivity and motivate employee in an organization.

A study conducted by Agbo (2010) in some West African countries including Nigeria reveals that most organization in developing countries, do not have structure to implement employee performance appraisal system in an appropriate manner. Hence, employee found it very difficult to believe, that they are appreciated for what they are doing at their workplace.

Non-performance appraisal do not actually motivate employee to put in their beat at work it is a major issue in cooperate Nigeria lody. Organization that do not have performance appraisal system plan based on the personality an nature of the employees hardly motivate their employees to work hard it certain appraisal packages offer by the organization do no speak of their need.

An average Nigerian workers place more important to the appraisal package or benefit he/she will derive from working, thereby they are very concerned about their performance in an organization.

In a sum, there are lots of problems associated with effective performance appraisal which includes untrained supervisors/managers, lack of effective metrics, inconsistent rating of employees, unreliable reward systems. It is on this premises that the study seek to know the effect of performance evaluation system on employee productivity.

Many of the studies on the impact of appraisal system on employee productivity were done outside Nigeria. These studies particularly focus on the public sectors. Research on appraisal system and employees’ productivity are very few. In Nigeria, most of the available studies about appraisal system were also theoretical studies whose findings were subjectively based on researchers’ personal opinions. It is noted that the past studies did not give adequate attention to the impact of appraisal system on employees’ productivity, as well as highlighting effective appraisal strategy that can stimulate better organization performance. Hence, the undertaking of this research work will fill in the gap by critically exploring the effect of appraisal system on employees’ productivity with a special reference to Cadbury Nig Plc.

1.3 Objectives of the Study

The main objective of the study is to examine the impact of appraisal system on employee productivity. Other specific objectives shall include:

To examine the relationship between performance appraisal system and employee performance.
To explore the nexus between periodic assessment and employees commitment to work
To examine whether performance appraisal reveals employees’ actual strengths and weaknesses in the organization
To examine the methods adopted in Cadbury Nig Plc to measure employee performance.
To suggest ways by which appraisal system could be used to enhance employee productivity.

1.4 Research Questions

The research project beam a searchlight on the following research questions:

What is the relationship between performance appraisal system and employee performance?
How does periodic assessment affect employee’s commitment to work?
Does performance appraisal reveal employees’ actual strengths and weaknesses in the organization?
What are the methods adopted in Cadbury Nig Plc to measure employee performance?

1.5 Research Hypotheses

The researcher intends to test the following hypotheses;

Hypothesis 1:

Ho: There is no significant relationship between appraisal system and employee performance.
H1: There is a significant relationship between appraisal system and employee performance.

Hypothesis 2:

Ho: There is no significant relationship between employee appraisal and managers/employee relation.
H1: There is a significant relationship between employee appraisal and managers/employee relation.

Hypothesis 3:

Ho: There is no significant relationship between employee appraisal and organizational performance.
H1: There is a significant relationship between employee appraisal and organizational performance.

1.6 Significance of the Study

The outcomes of this study will first, enable managers to identify the areas where development efforts are needed so that personal and career development will be enhanced. Again it will help managers to make out individuals who have specific skills so that their promotions and transfer will be in line with organizational requirements. In addition, it will enable managers to administer a formal organization reward and counsel poor performers.

Furthermore, it will inform managers about which selection devices and development programs are needed for the smooth running of organizations. Finally, other researchers studying in the field of human resource management may find this research helpful to extend their knowledge about performance appraisals.

1.7 Scope / Limitations of the Study

This study on impact of performance Appraisal was carried out in Cadbury Nig. Plc. This study will cover all the employee of the above mentioned organization.

Financial resource was a major limitation to the research. Time constraint was the most frustrating as some of the respondents did not fill the questionnaire due to lack of time. Again some of the employees gave safeguarded answers to some crucial questions. Retrieval of answered questionnaires was a real challenge to the research.

Chapter Five

Summary, Conclusions and Recommendations

5.1 Summary

The absence of effective performance appraisal is a fundamental cause of low output of staff to work. This project outlines the benefits that can be derived from the use of the performance appraisal system if it is properly administered to workers on the campus of Cadbury Nig, Plc. The project traces the need for the evaluation process of been streamlined, proper procedures put in place and the need to create awareness in the staff of the institution to know what is expected of them. Performance appraisal, if properly constituted enhances planning and proper scheduling of work; it also examines the ways and means of assisting newly employed staff to find their feet in their new environment because the orientation programme which is used to introduce them to their new offices can be viewed subset of the whole annual performance appraisal system.

The appraisal system also calls for accountability on the path of both staff and supervisor, since they are made aware of what is expected of them. Supervisors who at the end of the year are called upon to assess their subordinates would be expected to show leadership by example, whilst subordinate are also expected to do their work without being asked to, they would also be expected to exercise a lot of initiatives in their duties.

It was found out that performance appraisal influences performance positively. However, the researchers realized that performance appraisal is mostly undertaken on annual basis at the workplace. Time factor was another hindrance since the researcher had to combine work and studies making it difficult to follow up on some of the issues that needed to be followed up like the collection of questionnaires, and time allotted for the interview.

The system of measurement to be adopted in ranking the performance of staff was another hindrance because there was no easy way of getting one system that could be used to measure the standard of performance of all the staff at the organization

5.2 Conclusion

It is now appropriate to draw out the main conclusions of the study:

From the study, findings and analysis showed that favoritism has not got much influence in appraising performance. Again, it was also realized that the company uses rating scale, descriptive system and management by objective system methods of appraisal to evaluate employees. From the analysis, it was realized that management by objective is the mostly used method. Hence, it showed that appraisal is an ongoing process in the company.

Another finding also revealed that 50% of the respondents received feedback information while the rest 50% do not. Finally, we realized from the research that performance appraisal has got much influence on job performance. In other words, it was realized that appraisal has got a positive influence on performance.

5.3 Recommendation

From the above findings and conclusion, the research study recommends that organizations should enhance their employee’s productivity by appraising employee’s performance. The organization should then utilized accomplishments, targets, time management, organizational goals and efficiency for measuring performance purposes and evaluation process as it will help increase employee’s productivity.

From the research findings, the research study propose that organizations should develop and implement performance appraisal methods that would facilitate effective appraisal of the employees and hence providing opportunities to the organization in classifying performance targets, enhance employees performance, finding staff training needs and assisting employees on time management through proper planning and setting of deadlines. From the research results, the research study propose that companies should implement behavioural performance evaluation scheme and management by objectives as the appraisal methods were initiated to be statistically important in swaying employees relationship and enhancing employees productivity.

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